Correlation Between UGE International and American Security
Can any of the company-specific risk be diversified away by investing in both UGE International and American Security 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 UGE International and American Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UGE International and American Security Resources, you can compare the effects of market volatilities on UGE International and American Security 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 UGE International with a short position of American Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of UGE International and American Security.
Diversification Opportunities for UGE International and American Security
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between UGE and American is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding UGE International and American Security Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Security and UGE International 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 UGE International are associated (or correlated) with American Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Security has no effect on the direction of UGE International i.e., UGE International and American Security go up and down completely randomly.
Pair Corralation between UGE International and American Security
Assuming the 90 days horizon UGE International is expected to generate 4.28 times less return on investment than American Security. But when comparing it to its historical volatility, UGE International is 3.57 times less risky than American Security. It trades about 0.03 of its potential returns per unit of risk. American Security Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.02 in American Security Resources on October 24, 2024 and sell it today you would lose (0.01) from holding American Security Resources or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 78.27% |
| Values | Daily Returns |
UGE International vs. American Security Resources
Performance |
| Timeline |
| UGE International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Security |
UGE International and American Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UGE International and American Security
The main advantage of trading using opposite UGE International and American Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UGE International position performs unexpectedly, American Security 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 American Security will offset losses from the drop in American Security's long position.| UGE International vs. Fortum Oyj ADR | UGE International vs. Astra Energy | UGE International vs. Powertap Hydrogen Capital | UGE International vs. Brenmiller Energy Ltd |
| American Security vs. Astra Energy | American Security vs. Alternus Energy Group | American Security vs. Carnegie Clean Energy | American Security vs. Triad Pro Innovators |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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