Correlation Between UTI Asset and SBI Cards

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

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

Diversification Opportunities for UTI Asset and SBI Cards

-0.14

Correlation Coefficient

UTI Asset  SBI Cards

Good diversification

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

Pair Corralation between UTI Asset and SBI Cards

Assuming the 90 days trading horizon UTI Asset Management is expected to under-perform the SBI Cards. In addition to that, UTI Asset is 2.13 times more volatile than SBI Cards and. It trades about -0.03 of its total potential returns per unit of risk. SBI Cards and is currently generating about 0.11 per unit of volatility. If you would invest  68,845  in SBI Cards and on September 4, 2024 and sell it today you would earn a total of  1,460  from holding SBI Cards and or generate 2.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

UTI Asset Management  vs.  SBI Cards and

UTI Asset Management

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UTI Asset Management are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, UTI Asset may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SBI Cards

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SBI Cards and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with UTI Asset and SBI Cards

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

The idea behind UTI Asset Management and SBI Cards and 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.