Correlation Between PSG FINANCIAL and UNIVERSAL PARTNERS

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

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

Diversification Opportunities for PSG FINANCIAL and UNIVERSAL PARTNERS

1.0

Correlation Coefficient

PSG FINANCIAL  UNIVERSAL PARTNERS

No risk reduction

The 3 months correlation between PSG and UNIVERSAL is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding PSG FINANCIAL SERVICES 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 PSG FINANCIAL 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 PSG FINANCIAL SERVICES 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 PSG FINANCIAL i.e., PSG FINANCIAL and UNIVERSAL PARTNERS go up and down completely randomly.

Pair Corralation between PSG FINANCIAL and UNIVERSAL PARTNERS

If you would invest  90.00  in UNIVERSAL PARTNERS LTD on October 11, 2024 and sell it today you would earn a total of  0.00  from holding UNIVERSAL PARTNERS LTD or generate 0.0% return on investment over 90 days.

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

PSG FINANCIAL SERVICES  vs.  UNIVERSAL PARTNERS LTD

PSG FINANCIAL SERVICES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PSG FINANCIAL SERVICES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, PSG FINANCIAL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 PSG FINANCIAL and UNIVERSAL PARTNERS

The main advantage of trading using opposite PSG FINANCIAL and UNIVERSAL PARTNERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PSG FINANCIAL 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 PSG FINANCIAL SERVICES 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.