Correlation Between Usha Martin and Uniinfo Telecom

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

By analyzing existing cross correlation between Usha Martin Education and Uniinfo Telecom Services, you can compare the effects of market volatilities on Usha Martin and Uniinfo Telecom 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 Usha Martin with a short position of Uniinfo Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usha Martin and Uniinfo Telecom.

Diversification Opportunities for Usha Martin and Uniinfo Telecom

-0.14

Correlation Coefficient

Usha Martin  Uniinfo Telecom

Good diversification

The 3 months correlation between Usha and Uniinfo is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Usha Martin Education and Uniinfo Telecom Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniinfo Telecom Services and Usha Martin 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 Usha Martin Education are associated (or correlated) with Uniinfo Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniinfo Telecom Services has no effect on the direction of Usha Martin i.e., Usha Martin and Uniinfo Telecom go up and down completely randomly.

Pair Corralation between Usha Martin and Uniinfo Telecom

Assuming the 90 days trading horizon Usha Martin Education is expected to generate 1.19 times more return on investment than Uniinfo Telecom. However, Usha Martin is 1.19 times more volatile than Uniinfo Telecom Services. It trades about 0.0 of its potential returns per unit of risk. Uniinfo Telecom Services is currently generating about -0.04 per unit of risk. If you would invest  748.00  in Usha Martin Education on September 2, 2024 and sell it today you would lose (29.00) from holding Usha Martin Education or give up 3.88% of portfolio value over 90 days.

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

Usha Martin Education  vs.  Uniinfo Telecom Services

Usha Martin Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usha Martin Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Usha Martin is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Uniinfo Telecom Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniinfo Telecom Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Usha Martin and Uniinfo Telecom

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

The idea behind Usha Martin Education and Uniinfo Telecom Services 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.