Correlation Between Mtar Technologies and UPL

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

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

Diversification Opportunities for Mtar Technologies and UPL

-0.77

Correlation Coefficient

Mtar Technologies  UPL

Pay attention - limited upside

The 3 months correlation between Mtar and UPL is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mtar Technologies Limited and UPL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UPL Limited and Mtar Technologies 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 Mtar Technologies Limited are associated (or correlated) with UPL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UPL Limited has no effect on the direction of Mtar Technologies i.e., Mtar Technologies and UPL go up and down completely randomly.

Pair Corralation between Mtar Technologies and UPL

Assuming the 90 days trading horizon Mtar Technologies Limited is expected to under-perform the UPL. In addition to that, Mtar Technologies is 1.75 times more volatile than UPL Limited. It trades about -0.09 of its total potential returns per unit of risk. UPL Limited is currently generating about 0.23 per unit of volatility. If you would invest  50,770  in UPL Limited on December 23, 2024 and sell it today you would earn a total of  15,115  from holding UPL Limited or generate 29.77% return on investment over 90 days.

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

Mtar Technologies Limited  vs.  UPL Limited

Mtar Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mtar Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and 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.

UPL Limited

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UPL Limited are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, UPL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mtar Technologies and UPL

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

The idea behind Mtar Technologies Limited and UPL Limited 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.