Correlation Between Man Infraconstructio and UTI Asset

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

By analyzing existing cross correlation between Man Infraconstruction Limited and UTI Asset Management, you can compare the effects of market volatilities on Man Infraconstructio and UTI Asset 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 Man Infraconstructio with a short position of UTI Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Man Infraconstructio and UTI Asset.

Diversification Opportunities for Man Infraconstructio and UTI Asset

0.48

Correlation Coefficient

Man Infraconstructio  UTI Asset

Very weak diversification

The 3 months correlation between Man and UTI is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Man Infraconstruction Limited and UTI Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTI Asset Management and Man Infraconstructio 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 Man Infraconstruction Limited are associated (or correlated) with UTI Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTI Asset Management has no effect on the direction of Man Infraconstructio i.e., Man Infraconstructio and UTI Asset go up and down completely randomly.

Pair Corralation between Man Infraconstructio and UTI Asset

Assuming the 90 days trading horizon Man Infraconstruction Limited is expected to generate 0.79 times more return on investment than UTI Asset. However, Man Infraconstruction Limited is 1.27 times less risky than UTI Asset. It trades about 0.01 of its potential returns per unit of risk. UTI Asset Management is currently generating about -0.07 per unit of risk. If you would invest  24,180  in Man Infraconstruction Limited on October 10, 2024 and sell it today you would earn a total of  28.00  from holding Man Infraconstruction Limited or generate 0.12% return on investment over 90 days.

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

Man Infraconstruction Limited  vs.  UTI Asset Management

Man Infraconstruction

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Man Infraconstruction Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, Man Infraconstructio reported solid returns over the last few months and may actually be approaching a breakup point.

UTI Asset Management

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UTI Asset Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, UTI Asset may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Man Infraconstructio and UTI Asset

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

The idea behind Man Infraconstruction Limited and UTI Asset Management 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.