Correlation Between United Radiant and ANJI Technology

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

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

Diversification Opportunities for United Radiant and ANJI Technology

-0.39

Correlation Coefficient

United Radiant  ANJI Technology

Very good diversification

The 3 months correlation between United and ANJI is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding United Radiant Technology and ANJI Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANJI Technology and United Radiant 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 United Radiant Technology are associated (or correlated) with ANJI Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANJI Technology has no effect on the direction of United Radiant i.e., United Radiant and ANJI Technology go up and down completely randomly.

Pair Corralation between United Radiant and ANJI Technology

Assuming the 90 days trading horizon United Radiant Technology is expected to generate 1.02 times more return on investment than ANJI Technology. However, United Radiant is 1.02 times more volatile than ANJI Technology Co. It trades about 0.07 of its potential returns per unit of risk. ANJI Technology Co is currently generating about 0.06 per unit of risk. If you would invest  1,895  in United Radiant Technology on October 9, 2024 and sell it today you would earn a total of  215.00  from holding United Radiant Technology or generate 11.35% return on investment over 90 days.

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

United Radiant Technology  vs.  ANJI Technology Co

United Radiant Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in United Radiant Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, United Radiant showed solid returns over the last few months and may actually be approaching a breakup point.

ANJI Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANJI Technology Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ANJI Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with United Radiant and ANJI Technology

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

The idea behind United Radiant Technology and ANJI Technology 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.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.