Correlation Between INtRON Biotechnology and UIL
Can any of the company-specific risk be diversified away by investing in both INtRON Biotechnology and UIL 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 INtRON Biotechnology and UIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iNtRON Biotechnology and UIL Co, you can compare the effects of market volatilities on INtRON Biotechnology and UIL 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 INtRON Biotechnology with a short position of UIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of INtRON Biotechnology and UIL.
Diversification Opportunities for INtRON Biotechnology and UIL
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INtRON and UIL is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and UIL Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UIL Co and INtRON Biotechnology 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 iNtRON Biotechnology are associated (or correlated) with UIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UIL Co has no effect on the direction of INtRON Biotechnology i.e., INtRON Biotechnology and UIL go up and down completely randomly.
Pair Corralation between INtRON Biotechnology and UIL
Assuming the 90 days trading horizon iNtRON Biotechnology is expected to generate 1.08 times more return on investment than UIL. However, INtRON Biotechnology is 1.08 times more volatile than UIL Co. It trades about 0.01 of its potential returns per unit of risk. UIL Co is currently generating about -0.03 per unit of risk. If you would invest 562,000 in iNtRON Biotechnology on September 14, 2024 and sell it today you would lose (6,000) from holding iNtRON Biotechnology or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
iNtRON Biotechnology vs. UIL Co
Performance |
| Timeline |
| iNtRON Biotechnology |
| UIL Co |
INtRON Biotechnology and UIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INtRON Biotechnology and UIL
The main advantage of trading using opposite INtRON Biotechnology and UIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INtRON Biotechnology position performs unexpectedly, UIL 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 UIL will offset losses from the drop in UIL's long position.| INtRON Biotechnology vs. Samsung Electronics Co | INtRON Biotechnology vs. Samsung Electronics Co | INtRON Biotechnology vs. SK Hynix | INtRON Biotechnology vs. SK Holdings Co |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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