Correlation Between NEW MAURITIUS and UNIVERSAL PARTNERS

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

By analyzing existing cross correlation between NEW MAURITIUS HOTELS and UNIVERSAL PARTNERS LTD, you can compare the effects of market volatilities on NEW MAURITIUS and UNIVERSAL PARTNERS 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 NEW MAURITIUS with a short position of UNIVERSAL PARTNERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEW MAURITIUS and UNIVERSAL PARTNERS.

Diversification Opportunities for NEW MAURITIUS and UNIVERSAL PARTNERS

0.0

Correlation Coefficient

NEW MAURITIUS  UNIVERSAL PARTNERS

Pay attention - limited upside

The 3 months correlation between NEW and UNIVERSAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NEW MAURITIUS HOTELS and UNIVERSAL PARTNERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVERSAL PARTNERS LTD and NEW MAURITIUS 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 NEW MAURITIUS HOTELS are associated (or correlated) with UNIVERSAL PARTNERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVERSAL PARTNERS LTD has no effect on the direction of NEW MAURITIUS i.e., NEW MAURITIUS and UNIVERSAL PARTNERS go up and down completely randomly.

Pair Corralation between NEW MAURITIUS and UNIVERSAL PARTNERS

Assuming the 90 days trading horizon NEW MAURITIUS HOTELS is expected to generate 5.24 times more return on investment than UNIVERSAL PARTNERS. However, NEW MAURITIUS is 5.24 times more volatile than UNIVERSAL PARTNERS LTD. It trades about 0.06 of its potential returns per unit of risk. UNIVERSAL PARTNERS LTD is currently generating about -0.05 per unit of risk. If you would invest  858.00  in NEW MAURITIUS HOTELS on October 26, 2024 and sell it today you would earn a total of  492.00  from holding NEW MAURITIUS HOTELS or generate 57.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	80.61%
Values	Daily Returns

NEW MAURITIUS HOTELS  vs.  UNIVERSAL PARTNERS LTD

NEW MAURITIUS HOTELS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEW MAURITIUS HOTELS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, NEW MAURITIUS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

UNIVERSAL PARTNERS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNIVERSAL PARTNERS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, UNIVERSAL PARTNERS is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with NEW MAURITIUS and UNIVERSAL PARTNERS

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

The idea behind NEW MAURITIUS HOTELS and UNIVERSAL PARTNERS LTD 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.