Correlation Between Strattner Financial and Universal Systems
Can any of the company-specific risk be diversified away by investing in both Strattner Financial and Universal Systems 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 Strattner Financial and Universal Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strattner Financial Group and Universal Systems, you can compare the effects of market volatilities on Strattner Financial and Universal Systems 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 Strattner Financial with a short position of Universal Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strattner Financial and Universal Systems.
Diversification Opportunities for Strattner Financial and Universal Systems
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Strattner and Universal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Strattner Financial Group and Universal Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Systems and Strattner Financial 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 Strattner Financial Group are associated (or correlated) with Universal Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Systems has no effect on the direction of Strattner Financial i.e., Strattner Financial and Universal Systems go up and down completely randomly.
Pair Corralation between Strattner Financial and Universal Systems
Given the investment horizon of 90 days Strattner Financial Group is expected to generate 5.63 times more return on investment than Universal Systems. However, Strattner Financial is 5.63 times more volatile than Universal Systems. It trades about 0.05 of its potential returns per unit of risk. Universal Systems is currently generating about -0.02 per unit of risk. If you would invest 0.03 in Strattner Financial Group on September 3, 2024 and sell it today you would lose (0.01) from holding Strattner Financial Group or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strattner Financial Group vs. Universal Systems
Performance |
| Timeline |
| Strattner Financial |
| Universal Systems |
Strattner Financial and Universal Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strattner Financial and Universal Systems
The main advantage of trading using opposite Strattner Financial and Universal Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strattner Financial position performs unexpectedly, Universal Systems 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 Universal Systems will offset losses from the drop in Universal Systems' long position.| Strattner Financial vs. Seadrill Limited | Strattner Financial vs. Noble plc | Strattner Financial vs. Borr Drilling | Strattner Financial vs. SCOR PK |
| Universal Systems vs. GainClients | Universal Systems vs. Sixty Six Oilfield | Universal Systems vs. Buyer Group International | Universal Systems vs. XCPCNL Business Services |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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