Correlation Between Ubis Public and Yuasa Battery

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

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

Diversification Opportunities for Ubis Public and Yuasa Battery

0.89

Correlation Coefficient

Ubis Public  Yuasa Battery

Very poor diversification

The 3 months correlation between Ubis and Yuasa is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ubis Public and Yuasa Battery Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuasa Battery Public and Ubis Public 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 Ubis Public are associated (or correlated) with Yuasa Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuasa Battery Public has no effect on the direction of Ubis Public i.e., Ubis Public and Yuasa Battery go up and down completely randomly.

Pair Corralation between Ubis Public and Yuasa Battery

Assuming the 90 days trading horizon Ubis Public is expected to generate 2.18 times more return on investment than Yuasa Battery. However, Ubis Public is 2.18 times more volatile than Yuasa Battery Public. It trades about -0.05 of its potential returns per unit of risk. Yuasa Battery Public is currently generating about -0.2 per unit of risk. If you would invest  177.00  in Ubis Public on September 5, 2024 and sell it today you would lose (14.00) from holding Ubis Public or give up 7.91% of portfolio value over 90 days.

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

Ubis Public  vs.  Yuasa Battery Public

Ubis Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ubis Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Yuasa Battery Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yuasa Battery Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's fundamental drivers 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 Ubis Public and Yuasa Battery

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

The idea behind Ubis Public and Yuasa Battery Public 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.