Correlation Between Affiliated Resources and Ushio

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

By analyzing existing cross correlation between Affiliated Resources Corp and Ushio Inc, you can compare the effects of market volatilities on Affiliated Resources and Ushio 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 Affiliated Resources with a short position of Ushio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Resources and Ushio.

Diversification Opportunities for Affiliated Resources and Ushio

-0.26

Correlation Coefficient

Affiliated Resources  Ushio

Very good diversification

The 3 months correlation between Affiliated and Ushio is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Resources Corp and Ushio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ushio Inc and Affiliated Resources 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 Affiliated Resources Corp are associated (or correlated) with Ushio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ushio Inc has no effect on the direction of Affiliated Resources i.e., Affiliated Resources and Ushio go up and down completely randomly.

Pair Corralation between Affiliated Resources and Ushio

Given the investment horizon of 90 days Affiliated Resources is expected to generate 5.8 times less return on investment than Ushio. In addition to that, Affiliated Resources is 5.42 times more volatile than Ushio Inc. It trades about 0.0 of its total potential returns per unit of risk. Ushio Inc is currently generating about 0.1 per unit of volatility. If you would invest  1,302  in Ushio Inc on September 14, 2024 and sell it today you would earn a total of  98.00  from holding Ushio Inc or generate 7.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Affiliated Resources Corp  vs.  Ushio Inc

Affiliated Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Affiliated Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Affiliated Resources is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Ushio Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ushio Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Ushio may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Affiliated Resources and Ushio

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

The idea behind Affiliated Resources Corp and Ushio Inc 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.