Correlation Between Ingentec and Unitech Computer

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

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

Diversification Opportunities for Ingentec and Unitech Computer

-0.67

Correlation Coefficient

Ingentec  Unitech Computer

Excellent diversification

The 3 months correlation between Ingentec and Unitech is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ingentec and Unitech Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unitech Computer and Ingentec 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 Ingentec are associated (or correlated) with Unitech Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unitech Computer has no effect on the direction of Ingentec i.e., Ingentec and Unitech Computer go up and down completely randomly.

Pair Corralation between Ingentec and Unitech Computer

Assuming the 90 days trading horizon Ingentec is expected to under-perform the Unitech Computer. In addition to that, Ingentec is 1.23 times more volatile than Unitech Computer Co. It trades about -0.2 of its total potential returns per unit of risk. Unitech Computer Co is currently generating about -0.08 per unit of volatility. If you would invest  3,815  in Unitech Computer Co on September 28, 2024 and sell it today you would lose (95.00) from holding Unitech Computer Co or give up 2.49% of portfolio value over 90 days.

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

Ingentec  vs.  Unitech Computer Co

Ingentec

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ingentec has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Unitech Computer

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Unitech Computer Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Unitech Computer is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ingentec and Unitech Computer

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

The idea behind Ingentec and Unitech Computer 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.