Correlation Between THiRA-UTECH and LabGenomics

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

By analyzing existing cross correlation between THiRA UTECH LTD and LabGenomics Co, you can compare the effects of market volatilities on THiRA-UTECH and LabGenomics 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 THiRA-UTECH with a short position of LabGenomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of THiRA-UTECH and LabGenomics.

Diversification Opportunities for THiRA-UTECH and LabGenomics

0.23

Correlation Coefficient

THiRA-UTECH  LabGenomics

Modest diversification

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

Pair Corralation between THiRA-UTECH and LabGenomics

Assuming the 90 days trading horizon THiRA-UTECH is expected to generate 1.31 times less return on investment than LabGenomics. But when comparing it to its historical volatility, THiRA UTECH LTD is 1.44 times less risky than LabGenomics. It trades about 0.05 of its potential returns per unit of risk. LabGenomics Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  251,000  in LabGenomics Co on December 4, 2024 and sell it today you would earn a total of  17,000  from holding LabGenomics Co or generate 6.77% return on investment over 90 days.

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

THiRA UTECH LTD  vs.  LabGenomics Co

THiRA UTECH LTD

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in THiRA UTECH LTD are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, THiRA-UTECH may actually be approaching a critical reversion point that can send shares even higher in April 2025.

LabGenomics

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LabGenomics Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LabGenomics sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with THiRA-UTECH and LabGenomics

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

The idea behind THiRA UTECH LTD and LabGenomics 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.