Correlation Between Ua Multimedia and Image Protect

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

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

Diversification Opportunities for Ua Multimedia and Image Protect

0.08

Correlation Coefficient

Ua Multimedia  Image Protect

Significant diversification

The 3 months correlation between UAMM and Image is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ua Multimedia and Image Protect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Image Protect and Ua Multimedia 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 Ua Multimedia are associated (or correlated) with Image Protect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Image Protect has no effect on the direction of Ua Multimedia i.e., Ua Multimedia and Image Protect go up and down completely randomly.

Pair Corralation between Ua Multimedia and Image Protect

Given the investment horizon of 90 days Ua Multimedia is expected to generate 59.14 times less return on investment than Image Protect. But when comparing it to its historical volatility, Ua Multimedia is 10.81 times less risky than Image Protect. It trades about 0.04 of its potential returns per unit of risk. Image Protect is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Image Protect on September 15, 2024 and sell it today you would lose (0.01) from holding Image Protect or give up 50.0% of portfolio value over 90 days.

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

Ua Multimedia  vs.  Image Protect

Ua Multimedia

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ua Multimedia are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting primary indicators, Ua Multimedia displayed solid returns over the last few months and may actually be approaching a breakup point.

Image Protect

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Image Protect are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Image Protect disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ua Multimedia and Image Protect

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

The idea behind Ua Multimedia and Image Protect 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.