Correlation Between Unimit Engineering and Ubis Public

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

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

Diversification Opportunities for Unimit Engineering and Ubis Public

0.88

Correlation Coefficient

Unimit Engineering  Ubis Public

Very poor diversification

The 3 months correlation between Unimit and Ubis is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Unimit Engineering Public and Ubis Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubis Public and Unimit Engineering 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 Unimit Engineering Public are associated (or correlated) with Ubis Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubis Public has no effect on the direction of Unimit Engineering i.e., Unimit Engineering and Ubis Public go up and down completely randomly.

Pair Corralation between Unimit Engineering and Ubis Public

Assuming the 90 days trading horizon Unimit Engineering Public is expected to under-perform the Ubis Public. But the stock apears to be less risky and, when comparing its historical volatility, Unimit Engineering Public is 1.49 times less risky than Ubis Public. The stock trades about -0.09 of its potential returns per unit of risk. The Ubis Public is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  181.00  in Ubis Public on September 15, 2024 and sell it today you would lose (12.00) from holding Ubis Public or give up 6.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Unimit Engineering Public  vs.  Ubis Public

Unimit Engineering Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unimit Engineering Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Ubis Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ubis Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Ubis Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Unimit Engineering and Ubis Public

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

The idea behind Unimit Engineering Public and Ubis Public 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.