Correlation Between UJU Electronics and Kukil Metal

Can any of the company-specific risk be diversified away by investing in both UJU Electronics and Kukil Metal 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 UJU Electronics and Kukil Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UJU Electronics Co and Kukil Metal Co, you can compare the effects of market volatilities on UJU Electronics and Kukil Metal 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 UJU Electronics with a short position of Kukil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of UJU Electronics and Kukil Metal.

Diversification Opportunities for UJU Electronics and Kukil Metal

0.23

Correlation Coefficient

UJU Electronics  Kukil Metal

Modest diversification

The 3 months correlation between UJU and Kukil is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding UJU Electronics Co and Kukil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukil Metal and UJU 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 UJU Electronics Co are associated (or correlated) with Kukil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukil Metal has no effect on the direction of UJU Electronics i.e., UJU Electronics and Kukil Metal go up and down completely randomly.

Pair Corralation between UJU Electronics and Kukil Metal

Assuming the 90 days trading horizon UJU Electronics Co is expected to generate 2.08 times more return on investment than Kukil Metal. However, UJU Electronics is 2.08 times more volatile than Kukil Metal Co. It trades about 0.16 of its potential returns per unit of risk. Kukil Metal Co is currently generating about -0.03 per unit of risk. If you would invest  1,473,692  in UJU Electronics Co on October 23, 2024 and sell it today you would earn a total of  536,308  from holding UJU Electronics Co or generate 36.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

UJU Electronics Co  vs.  Kukil Metal Co

UJU Electronics

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UJU Electronics Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, UJU Electronics sustained solid returns over the last few months and may actually be approaching a breakup point.

Kukil Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kukil Metal Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kukil Metal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with UJU Electronics and Kukil Metal

The main advantage of trading using opposite UJU Electronics and Kukil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UJU Electronics position performs unexpectedly, Kukil Metal 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 Kukil Metal will offset losses from the drop in Kukil Metal's long position.

The idea behind UJU Electronics Co and Kukil Metal Co 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.