Correlation Between Alpha Trust and Unibios Holdings

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

By analyzing existing cross correlation between Alpha Trust Mutual and Unibios Holdings SA, you can compare the effects of market volatilities on Alpha Trust and Unibios Holdings 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 Alpha Trust with a short position of Unibios Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Trust and Unibios Holdings.

Diversification Opportunities for Alpha Trust and Unibios Holdings

-0.36

Correlation Coefficient

Alpha Trust  Unibios Holdings

Very good diversification

The 3 months correlation between Alpha and Unibios is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Trust Mutual and Unibios Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unibios Holdings and Alpha Trust 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 Alpha Trust Mutual are associated (or correlated) with Unibios Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unibios Holdings has no effect on the direction of Alpha Trust i.e., Alpha Trust and Unibios Holdings go up and down completely randomly.

Pair Corralation between Alpha Trust and Unibios Holdings

Assuming the 90 days trading horizon Alpha Trust is expected to generate 1.2 times less return on investment than Unibios Holdings. But when comparing it to its historical volatility, Alpha Trust Mutual is 2.37 times less risky than Unibios Holdings. It trades about 0.16 of its potential returns per unit of risk. Unibios Holdings SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  62.00  in Unibios Holdings SA on September 13, 2024 and sell it today you would earn a total of  84.00  from holding Unibios Holdings SA or generate 135.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Alpha Trust Mutual  vs.  Unibios Holdings SA

Alpha Trust Mutual

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpha Trust Mutual has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alpha Trust is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Unibios Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unibios Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Alpha Trust and Unibios Holdings

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

The idea behind Alpha Trust Mutual and Unibios Holdings SA 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.