Correlation Between UET United and TEGNA

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

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

Diversification Opportunities for UET United and TEGNA

0.53

Correlation Coefficient

UET United  TEGNA

Very weak diversification

The 3 months correlation between UET and TEGNA is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and TEGNA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEGNA Inc and UET United 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 UET United Electronic are associated (or correlated) with TEGNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEGNA Inc has no effect on the direction of UET United i.e., UET United and TEGNA go up and down completely randomly.

Pair Corralation between UET United and TEGNA

Assuming the 90 days trading horizon UET United Electronic is expected to under-perform the TEGNA. In addition to that, UET United is 1.58 times more volatile than TEGNA Inc. It trades about -0.06 of its total potential returns per unit of risk. TEGNA Inc is currently generating about 0.03 per unit of volatility. If you would invest  1,770  in TEGNA Inc on October 10, 2024 and sell it today you would earn a total of  10.00  from holding TEGNA Inc or generate 0.56% return on investment over 90 days.

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

UET United Electronic  vs.  TEGNA Inc

UET United Electronic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UET United Electronic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, UET United unveiled solid returns over the last few months and may actually be approaching a breakup point.

TEGNA Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TEGNA Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TEGNA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UET United and TEGNA

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

The idea behind UET United Electronic and TEGNA 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.