Correlation Between Uchi Technologies and Carlsberg Brewery

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

By analyzing existing cross correlation between Uchi Technologies Bhd and Carlsberg Brewery Malaysia, you can compare the effects of market volatilities on Uchi Technologies and Carlsberg Brewery 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 Uchi Technologies with a short position of Carlsberg Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uchi Technologies and Carlsberg Brewery.

Diversification Opportunities for Uchi Technologies and Carlsberg Brewery

-0.05

Correlation Coefficient

Uchi Technologies  Carlsberg Brewery

Good diversification

The 3 months correlation between Uchi and Carlsberg is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Uchi Technologies Bhd and Carlsberg Brewery Malaysia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg Brewery and Uchi Technologies 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 Uchi Technologies Bhd are associated (or correlated) with Carlsberg Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg Brewery has no effect on the direction of Uchi Technologies i.e., Uchi Technologies and Carlsberg Brewery go up and down completely randomly.

Pair Corralation between Uchi Technologies and Carlsberg Brewery

Assuming the 90 days trading horizon Uchi Technologies Bhd is expected to generate 1.22 times more return on investment than Carlsberg Brewery. However, Uchi Technologies is 1.22 times more volatile than Carlsberg Brewery Malaysia. It trades about -0.15 of its potential returns per unit of risk. Carlsberg Brewery Malaysia is currently generating about -0.35 per unit of risk. If you would invest  387.00  in Uchi Technologies Bhd on December 2, 2024 and sell it today you would lose (12.00) from holding Uchi Technologies Bhd or give up 3.1% of portfolio value over 90 days.

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

Uchi Technologies Bhd  vs.  Carlsberg Brewery Malaysia

Uchi Technologies Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uchi Technologies Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Uchi Technologies is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Carlsberg Brewery

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carlsberg Brewery Malaysia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Uchi Technologies and Carlsberg Brewery

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

The idea behind Uchi Technologies Bhd and Carlsberg Brewery Malaysia 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.