Correlation Between Tilray and Ubiquitech Software

Can any of the company-specific risk be diversified away by investing in both Tilray and Ubiquitech Software 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 Tilray and Ubiquitech Software into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tilray Inc and Ubiquitech Software, you can compare the effects of market volatilities on Tilray and Ubiquitech Software 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 Tilray with a short position of Ubiquitech Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tilray and Ubiquitech Software.

Diversification Opportunities for Tilray and Ubiquitech Software

0.28

Correlation Coefficient

Tilray  Ubiquitech Software

Modest diversification

The 3 months correlation between Tilray and Ubiquitech is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tilray Inc and Ubiquitech Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubiquitech Software and Tilray 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 Tilray Inc are associated (or correlated) with Ubiquitech Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubiquitech Software has no effect on the direction of Tilray i.e., Tilray and Ubiquitech Software go up and down completely randomly.

Pair Corralation between Tilray and Ubiquitech Software

Given the investment horizon of 90 days Tilray Inc is expected to under-perform the Ubiquitech Software. But the stock apears to be less risky and, when comparing its historical volatility, Tilray Inc is 107.05 times less risky than Ubiquitech Software. The stock trades about -0.18 of its potential returns per unit of risk. The Ubiquitech Software is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Ubiquitech Software on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Ubiquitech Software or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Tilray Inc  vs.  Ubiquitech Software

Tilray Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tilray Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ubiquitech Software

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Ubiquitech Software are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Ubiquitech Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tilray and Ubiquitech Software

The main advantage of trading using opposite Tilray and Ubiquitech Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tilray position performs unexpectedly, Ubiquitech Software 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 Ubiquitech Software will offset losses from the drop in Ubiquitech Software's long position.

The idea behind Tilray Inc and Ubiquitech Software 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.