Correlation Between Tether and UTK

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

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

Diversification Opportunities for Tether and UTK

0.0

Correlation Coefficient

Tether  UTK

Pay attention - limited upside

The 3 months correlation between Tether and UTK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tether and UTK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTK and Tether 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 Tether are associated (or correlated) with UTK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTK has no effect on the direction of Tether i.e., Tether and UTK go up and down completely randomly.

Pair Corralation between Tether and UTK

If you would invest  4.32  in UTK on September 1, 2024 and sell it today you would earn a total of  1.08  from holding UTK or generate 25.0% return on investment over 90 days.

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

Tether  vs.  UTK

Tether

Risk-Adjusted Performance

0 of 100

Very Weak

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

UTK

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UTK are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, UTK exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tether and UTK

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

The idea behind Tether and UTK 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.

Check out your portfolio center.

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.