Correlation Between UIL and Intops
Can any of the company-specific risk be diversified away by investing in both UIL and Intops 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 UIL and Intops into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UIL Co and Intops Co, you can compare the effects of market volatilities on UIL and Intops 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 UIL with a short position of Intops. Check out your portfolio center. Please also check ongoing floating volatility patterns of UIL and Intops.
Diversification Opportunities for UIL and Intops
Very poor diversification
The 3 months correlation between UIL and Intops is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding UIL Co and Intops Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intops and UIL 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 UIL Co are associated (or correlated) with Intops. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intops has no effect on the direction of UIL i.e., UIL and Intops go up and down completely randomly.
Pair Corralation between UIL and Intops
Assuming the 90 days trading horizon UIL Co is expected to under-perform the Intops. But the stock apears to be less risky and, when comparing its historical volatility, UIL Co is 1.29 times less risky than Intops. The stock trades about -0.11 of its potential returns per unit of risk. The Intops Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 2,350,233 in Intops Co on September 3, 2024 and sell it today you would lose (525,233) from holding Intops Co or give up 22.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UIL Co vs. Intops Co
Performance |
| Timeline |
| UIL Co |
| Intops |
UIL and Intops Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UIL and Intops
The main advantage of trading using opposite UIL and Intops positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UIL position performs unexpectedly, Intops 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 Intops will offset losses from the drop in Intops' long position.| UIL vs. Dongsin Engineering Construction | UIL vs. Doosan Fuel Cell | UIL vs. Daishin Balance 1 | UIL vs. Total Soft Bank |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |