Correlation Between UPC Technology and USI Corp
Can any of the company-specific risk be diversified away by investing in both UPC Technology and USI Corp 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 UPC Technology and USI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UPC Technology Corp and USI Corp, you can compare the effects of market volatilities on UPC Technology and USI Corp 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 UPC Technology with a short position of USI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of UPC Technology and USI Corp.
Diversification Opportunities for UPC Technology and USI Corp
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between UPC and USI is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding UPC Technology Corp and USI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USI Corp and UPC Technology 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 UPC Technology Corp are associated (or correlated) with USI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USI Corp has no effect on the direction of UPC Technology i.e., UPC Technology and USI Corp go up and down completely randomly.
Pair Corralation between UPC Technology and USI Corp
Assuming the 90 days trading horizon UPC Technology Corp is expected to generate 0.88 times more return on investment than USI Corp. However, UPC Technology Corp is 1.13 times less risky than USI Corp. It trades about -0.07 of its potential returns per unit of risk. USI Corp is currently generating about -0.07 per unit of risk. If you would invest 1,475 in UPC Technology Corp on August 25, 2024 and sell it today you would lose (400.00) from holding UPC Technology Corp or give up 27.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UPC Technology Corp vs. USI Corp
Performance |
| Timeline |
| UPC Technology Corp |
| USI Corp |
UPC Technology and USI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UPC Technology and USI Corp
The main advantage of trading using opposite UPC Technology and USI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UPC Technology position performs unexpectedly, USI Corp 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 USI Corp will offset losses from the drop in USI Corp's long position.| UPC Technology vs. USI Corp | UPC Technology vs. Taiwan Styrene Monomer | UPC Technology vs. Asia Polymer Corp | UPC Technology vs. Grand Pacific Petrochemical |
| USI Corp vs. Asia Polymer Corp | USI Corp vs. Taiwan Styrene Monomer | USI Corp vs. UPC Technology Corp | USI Corp vs. China Petrochemical Development |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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