Correlation Between Grand Havana and UPD Holding

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

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

Diversification Opportunities for Grand Havana and UPD Holding

0.22

Correlation Coefficient

Grand Havana  UPD Holding

Modest diversification

The 3 months correlation between Grand and UPD is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Grand Havana and UPD Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPD Holding Corp and Grand Havana 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 Grand Havana are associated (or correlated) with UPD Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPD Holding Corp has no effect on the direction of Grand Havana i.e., Grand Havana and UPD Holding go up and down completely randomly.

Pair Corralation between Grand Havana and UPD Holding

Given the investment horizon of 90 days Grand Havana is expected to generate 1.56 times more return on investment than UPD Holding. However, Grand Havana is 1.56 times more volatile than UPD Holding Corp. It trades about 0.01 of its potential returns per unit of risk. UPD Holding Corp is currently generating about -0.13 per unit of risk. If you would invest  0.06  in Grand Havana on December 26, 2024 and sell it today you would lose (0.01) from holding Grand Havana or give up 16.67% of portfolio value over 90 days.

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

Grand Havana  vs.  UPD Holding Corp

Grand Havana

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Havana are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Grand Havana may actually be approaching a critical reversion point that can send shares even higher in April 2025.

UPD Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days UPD Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Grand Havana and UPD Holding

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

The idea behind Grand Havana and UPD Holding Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.