Correlation Between USI Corp and UPC Technology
Can any of the company-specific risk be diversified away by investing in both USI Corp and UPC Technology 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 USI Corp and UPC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USI Corp and UPC Technology Corp, you can compare the effects of market volatilities on USI Corp and UPC Technology 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 USI Corp with a short position of UPC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of USI Corp and UPC Technology.
Diversification Opportunities for USI Corp and UPC Technology
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between USI and UPC is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding USI Corp and UPC Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPC Technology Corp and USI Corp 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 USI Corp are associated (or correlated) with UPC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPC Technology Corp has no effect on the direction of USI Corp i.e., USI Corp and UPC Technology go up and down completely randomly.
Pair Corralation between USI Corp and UPC Technology
Assuming the 90 days trading horizon USI Corp is expected to under-perform the UPC Technology. In addition to that, USI Corp is 1.06 times more volatile than UPC Technology Corp. It trades about -0.1 of its total potential returns per unit of risk. UPC Technology Corp is currently generating about -0.08 per unit of volatility. If you would invest 1,190 in UPC Technology Corp on August 25, 2024 and sell it today you would lose (115.00) from holding UPC Technology Corp or give up 9.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
USI Corp vs. UPC Technology Corp
Performance |
| Timeline |
| USI Corp |
| UPC Technology Corp |
USI Corp and UPC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USI Corp and UPC Technology
The main advantage of trading using opposite USI Corp and UPC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USI Corp position performs unexpectedly, UPC Technology 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 UPC Technology will offset losses from the drop in UPC Technology's long position.| USI Corp vs. Asia Polymer Corp | USI Corp vs. Taiwan Styrene Monomer | USI Corp vs. UPC Technology Corp | USI Corp vs. China Petrochemical Development |
| UPC Technology vs. USI Corp | UPC Technology vs. Taiwan Styrene Monomer | UPC Technology vs. Asia Polymer Corp | UPC Technology vs. Grand Pacific Petrochemical |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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