Correlation Between Blockchain Industries and UMF

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

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

Diversification Opportunities for Blockchain Industries and UMF

0.02

Correlation Coefficient

Blockchain Industries  UMF

Significant diversification

The 3 months correlation between Blockchain and UMF is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Blockchain Industries and UMF Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMF Group and Blockchain Industries 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 Blockchain Industries are associated (or correlated) with UMF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UMF Group has no effect on the direction of Blockchain Industries i.e., Blockchain Industries and UMF go up and down completely randomly.

Pair Corralation between Blockchain Industries and UMF

If you would invest  1.50  in UMF Group on October 18, 2024 and sell it today you would earn a total of  0.00  from holding UMF Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Blockchain Industries  vs.  UMF Group

Blockchain Industries

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Blockchain Industries are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating forward indicators, Blockchain Industries demonstrated solid returns over the last few months and may actually be approaching a breakup point.

UMF Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UMF Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, UMF is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Blockchain Industries and UMF

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

The idea behind Blockchain Industries and UMF Group 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.