Correlation Between UHF Logistics and Southern ITS

Can any of the company-specific risk be diversified away by investing in both UHF Logistics and Southern ITS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining UHF Logistics and Southern ITS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UHF Logistics Group and Southern ITS International, you can compare the effects of market volatilities on UHF Logistics and Southern ITS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in UHF Logistics with a short position of Southern ITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of UHF Logistics and Southern ITS.

Diversification Opportunities for UHF Logistics and Southern ITS

0.03

Correlation Coefficient

UHF Logistics  Southern ITS

Significant diversification

The 3 months correlation between UHF and Southern is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding UHF Logistics Group and Southern ITS International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern ITS Interna and UHF Logistics is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on UHF Logistics Group are associated (or correlated) with Southern ITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern ITS Interna has no effect on the direction of UHF Logistics i.e., UHF Logistics and Southern ITS go up and down completely randomly.

Pair Corralation between UHF Logistics and Southern ITS

Given the investment horizon of 90 days UHF Logistics Group is expected to generate 6.46 times more return on investment than Southern ITS. However, UHF Logistics is 6.46 times more volatile than Southern ITS International. It trades about 0.15 of its potential returns per unit of risk. Southern ITS International is currently generating about 0.01 per unit of risk. If you would invest  6.75  in UHF Logistics Group on September 15, 2024 and sell it today you would earn a total of  2.53  from holding UHF Logistics Group or generate 37.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

UHF Logistics Group  vs.  Southern ITS International

UHF Logistics Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UHF Logistics Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, UHF Logistics reported solid returns over the last few months and may actually be approaching a breakup point.

Southern ITS Interna

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Southern ITS International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Southern ITS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with UHF Logistics and Southern ITS

The main advantage of trading using opposite UHF Logistics and Southern ITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UHF Logistics position performs unexpectedly, Southern ITS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Southern ITS will offset losses from the drop in Southern ITS's long position.

The idea behind UHF Logistics Group and Southern ITS International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.