Correlation Between Universal and Lithia
Specify exactly 2 symbols:
By analyzing existing cross correlation between Universal and Lithia Motors 4625, you can compare the effects of market volatilities on Universal and Lithia 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 with a short position of Lithia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal and Lithia.
Diversification Opportunities for Universal and Lithia
Excellent diversification
The 3 months correlation between Universal and Lithia is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Universal and Lithia Motors 4625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithia Motors 4625 and Universal 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 are associated (or correlated) with Lithia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithia Motors 4625 has no effect on the direction of Universal i.e., Universal and Lithia go up and down completely randomly.
Pair Corralation between Universal and Lithia
Considering the 90-day investment horizon Universal is expected to generate 0.93 times more return on investment than Lithia. However, Universal is 1.07 times less risky than Lithia. It trades about 0.1 of its potential returns per unit of risk. Lithia Motors 4625 is currently generating about -0.14 per unit of risk. If you would invest 5,277 in Universal on September 3, 2024 and sell it today you would earn a total of 435.00 from holding Universal or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 76.56% |
| Values | Daily Returns |
Universal vs. Lithia Motors 4625
Performance |
| Timeline |
| Universal |
| Lithia Motors 4625 |
Universal and Lithia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal and Lithia
The main advantage of trading using opposite Universal and Lithia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal position performs unexpectedly, Lithia 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 Lithia will offset losses from the drop in Lithia's long position.| Universal vs. Imperial Brands PLC | Universal vs. Japan Tobacco ADR | Universal vs. Philip Morris International | Universal vs. Turning Point Brands |
| Lithia vs. Western Acquisition Ventures | Lithia vs. Barrick Gold Corp | Lithia vs. Universal | Lithia vs. Inflection Point Acquisition |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |