Correlation Between Universal Electronics and Utime
Can any of the company-specific risk be diversified away by investing in both Universal Electronics and Utime 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 Universal Electronics and Utime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Electronics and Utime, you can compare the effects of market volatilities on Universal Electronics and Utime 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 Universal Electronics with a short position of Utime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Electronics and Utime.
Diversification Opportunities for Universal Electronics and Utime
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Universal and Utime is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Universal Electronics and Utime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utime and Universal Electronics 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 Universal Electronics are associated (or correlated) with Utime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utime has no effect on the direction of Universal Electronics i.e., Universal Electronics and Utime go up and down completely randomly.
Pair Corralation between Universal Electronics and Utime
Given the investment horizon of 90 days Universal Electronics is expected to under-perform the Utime. But the stock apears to be less risky and, when comparing its historical volatility, Universal Electronics is 6.17 times less risky than Utime. The stock trades about -0.03 of its potential returns per unit of risk. The Utime is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 98.00 in Utime on November 2, 2024 and sell it today you would lose (43.00) from holding Utime or give up 43.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 22.67% |
| Values | Daily Returns |
Universal Electronics vs. Utime
Performance |
| Timeline |
| Universal Electronics |
| Utime |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Universal Electronics and Utime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Electronics and Utime
The main advantage of trading using opposite Universal Electronics and Utime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Electronics position performs unexpectedly, Utime 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 Utime will offset losses from the drop in Utime's long position.| Universal Electronics vs. LG Display Co | Universal Electronics vs. Zepp Health Corp | Universal Electronics vs. Sonos Inc | Universal Electronics vs. VOXX International |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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