Correlation Between UNITED INVESTMENTS and FINCORP INVESTMENT

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

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

Diversification Opportunities for UNITED INVESTMENTS and FINCORP INVESTMENT

-0.45

Correlation Coefficient

UNITED INVESTMENTS  FINCORP INVESTMENT

Very good diversification

The 3 months correlation between UNITED and FINCORP is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding UNITED INVESTMENTS LTD and FINCORP INVESTMENT LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FINCORP INVESTMENT LTD and UNITED INVESTMENTS 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 UNITED INVESTMENTS LTD are associated (or correlated) with FINCORP INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FINCORP INVESTMENT LTD has no effect on the direction of UNITED INVESTMENTS i.e., UNITED INVESTMENTS and FINCORP INVESTMENT go up and down completely randomly.

Pair Corralation between UNITED INVESTMENTS and FINCORP INVESTMENT

Assuming the 90 days trading horizon UNITED INVESTMENTS LTD is expected to under-perform the FINCORP INVESTMENT. In addition to that, UNITED INVESTMENTS is 1.06 times more volatile than FINCORP INVESTMENT LTD. It trades about -0.12 of its total potential returns per unit of risk. FINCORP INVESTMENT LTD is currently generating about 0.06 per unit of volatility. If you would invest  1,635  in FINCORP INVESTMENT LTD on September 5, 2024 and sell it today you would earn a total of  115.00  from holding FINCORP INVESTMENT LTD or generate 7.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

UNITED INVESTMENTS LTD  vs.  FINCORP INVESTMENT LTD

UNITED INVESTMENTS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNITED INVESTMENTS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

FINCORP INVESTMENT LTD

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FINCORP INVESTMENT LTD are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, FINCORP INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with UNITED INVESTMENTS and FINCORP INVESTMENT

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

The idea behind UNITED INVESTMENTS LTD and FINCORP INVESTMENT LTD 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.