Correlation Between Universal Stainless and Arm Holdings
Can any of the company-specific risk be diversified away by investing in both Universal Stainless and Arm Holdings 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 Stainless and Arm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Stainless Alloy and Arm Holdings plc, you can compare the effects of market volatilities on Universal Stainless and Arm Holdings 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 Stainless with a short position of Arm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Stainless and Arm Holdings.
Diversification Opportunities for Universal Stainless and Arm Holdings
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and Arm is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Universal Stainless Alloy and Arm Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arm Holdings plc and Universal Stainless 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 Stainless Alloy are associated (or correlated) with Arm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arm Holdings plc has no effect on the direction of Universal Stainless i.e., Universal Stainless and Arm Holdings go up and down completely randomly.
Pair Corralation between Universal Stainless and Arm Holdings
Given the investment horizon of 90 days Universal Stainless Alloy is expected to generate 0.08 times more return on investment than Arm Holdings. However, Universal Stainless Alloy is 11.94 times less risky than Arm Holdings. It trades about -0.02 of its potential returns per unit of risk. Arm Holdings plc is currently generating about -0.03 per unit of risk. If you would invest 4,435 in Universal Stainless Alloy on October 15, 2024 and sell it today you would lose (5.00) from holding Universal Stainless Alloy or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Stainless Alloy vs. Arm Holdings plc
Performance |
| Timeline |
| Universal Stainless Alloy |
| Arm Holdings plc |
Universal Stainless and Arm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Stainless and Arm Holdings
The main advantage of trading using opposite Universal Stainless and Arm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Stainless position performs unexpectedly, Arm Holdings 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 Arm Holdings will offset losses from the drop in Arm Holdings' long position.| Universal Stainless vs. Olympic Steel | Universal Stainless vs. Outokumpu Oyj ADR | Universal Stainless vs. Usinas Siderurgicas de | Universal Stainless vs. POSCO Holdings |
| Arm Holdings vs. Addus HomeCare | Arm Holdings vs. Precision Optics, | Arm Holdings vs. Utah Medical Products | Arm Holdings vs. Franklin Wireless Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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