Correlation Between Uniphar Group and FD Technologies

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

By analyzing existing cross correlation between Uniphar Group PLC and FD Technologies PLC, you can compare the effects of market volatilities on Uniphar Group and FD Technologies 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 Uniphar Group with a short position of FD Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniphar Group and FD Technologies.

Diversification Opportunities for Uniphar Group and FD Technologies

-0.81

Correlation Coefficient

Uniphar Group  FD Technologies

Pay attention - limited upside

The 3 months correlation between Uniphar and GYQ is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Uniphar Group PLC and FD Technologies PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FD Technologies PLC and Uniphar Group 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 Uniphar Group PLC are associated (or correlated) with FD Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FD Technologies PLC has no effect on the direction of Uniphar Group i.e., Uniphar Group and FD Technologies go up and down completely randomly.

Pair Corralation between Uniphar Group and FD Technologies

Assuming the 90 days trading horizon Uniphar Group PLC is expected to under-perform the FD Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Uniphar Group PLC is 1.16 times less risky than FD Technologies. The stock trades about -0.03 of its potential returns per unit of risk. The FD Technologies PLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,490  in FD Technologies PLC on September 19, 2024 and sell it today you would earn a total of  630.00  from holding FD Technologies PLC or generate 42.28% return on investment over 90 days.

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

Uniphar Group PLC  vs.  FD Technologies PLC

Uniphar Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniphar Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

FD Technologies PLC

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FD Technologies PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, FD Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Uniphar Group and FD Technologies

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

The idea behind Uniphar Group PLC and FD Technologies PLC 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .