Correlation Between Computer Age and UCO Bank

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

By analyzing existing cross correlation between Computer Age Management and UCO Bank, you can compare the effects of market volatilities on Computer Age and UCO Bank 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 Computer Age with a short position of UCO Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer Age and UCO Bank.

Diversification Opportunities for Computer Age and UCO Bank

0.31

Correlation Coefficient

Computer Age  UCO Bank

Weak diversification

The 3 months correlation between Computer and UCO is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Computer Age Management and UCO Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UCO Bank and Computer Age 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 Computer Age Management are associated (or correlated) with UCO Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UCO Bank has no effect on the direction of Computer Age i.e., Computer Age and UCO Bank go up and down completely randomly.

Pair Corralation between Computer Age and UCO Bank

Assuming the 90 days trading horizon Computer Age Management is expected to generate 1.24 times more return on investment than UCO Bank. However, Computer Age is 1.24 times more volatile than UCO Bank. It trades about 0.1 of its potential returns per unit of risk. UCO Bank is currently generating about -0.07 per unit of risk. If you would invest  364,818  in Computer Age Management on September 23, 2024 and sell it today you would earn a total of  130,282  from holding Computer Age Management or generate 35.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Computer Age Management  vs.  UCO Bank

Computer Age Management

Risk-Adjusted Performance

4 of 100

Insignificant

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

UCO Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UCO Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating 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 Computer Age and UCO Bank

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

The idea behind Computer Age Management and UCO Bank 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.