Correlation Between Public Power and Unibios Holdings

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

By analyzing existing cross correlation between Public Power and Unibios Holdings SA, you can compare the effects of market volatilities on Public Power and Unibios Holdings 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 Public Power with a short position of Unibios Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Power and Unibios Holdings.

Diversification Opportunities for Public Power and Unibios Holdings

-0.18

Correlation Coefficient

Public Power  Unibios Holdings

Good diversification

The 3 months correlation between Public and Unibios is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Public Power and Unibios Holdings SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unibios Holdings and Public Power 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 Public Power are associated (or correlated) with Unibios Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unibios Holdings has no effect on the direction of Public Power i.e., Public Power and Unibios Holdings go up and down completely randomly.

Pair Corralation between Public Power and Unibios Holdings

Assuming the 90 days trading horizon Public Power is expected to generate 0.69 times more return on investment than Unibios Holdings. However, Public Power is 1.45 times less risky than Unibios Holdings. It trades about 0.01 of its potential returns per unit of risk. Unibios Holdings SA is currently generating about -0.1 per unit of risk. If you would invest  1,163  in Public Power on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Public Power or generate 0.0% return on investment over 90 days.

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

Public Power  vs.  Unibios Holdings SA

Public Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Public Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Public Power is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Unibios Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unibios Holdings SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Public Power and Unibios Holdings

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

The idea behind Public Power and Unibios Holdings SA 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.