Correlation Between Ubis Public and CPR Gomu

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Can any of the company-specific risk be diversified away by investing in both Ubis Public and CPR Gomu 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 Ubis Public and CPR Gomu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ubis Public and CPR Gomu Industrial, you can compare the effects of market volatilities on Ubis Public and CPR Gomu 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 Ubis Public with a short position of CPR Gomu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubis Public and CPR Gomu.

Diversification Opportunities for Ubis Public and CPR Gomu

-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Ubis and CPR is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ubis Public and CPR Gomu Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPR Gomu Industrial and Ubis Public 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 Ubis Public are associated (or correlated) with CPR Gomu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPR Gomu Industrial has no effect on the direction of Ubis Public i.e., Ubis Public and CPR Gomu go up and down completely randomly.

Pair Corralation between Ubis Public and CPR Gomu

Assuming the 90 days trading horizon Ubis Public is expected to under-perform the CPR Gomu. But the stock apears to be less risky and, when comparing its historical volatility, Ubis Public is 1.8 times less risky than CPR Gomu. The stock trades about -0.27 of its potential returns per unit of risk. The CPR Gomu Industrial is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  292.00  in CPR Gomu Industrial on September 12, 2024 and sell it today you would earn a total of  54.00  from holding CPR Gomu Industrial or generate 18.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ubis Public  vs.  CPR Gomu Industrial

 Performance 
       Timeline  
Ubis Public 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ubis Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
CPR Gomu Industrial 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in CPR Gomu Industrial are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, CPR Gomu may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ubis Public and CPR Gomu Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ubis Public and CPR Gomu

The main advantage of trading using opposite Ubis Public and CPR Gomu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubis Public position performs unexpectedly, CPR Gomu 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 CPR Gomu will offset losses from the drop in CPR Gomu's long position.
The idea behind Ubis Public and CPR Gomu Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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