Correlation Between Ubiquitech Software and Khiron Life

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

By analyzing existing cross correlation between Ubiquitech Software and Khiron Life Sciences, you can compare the effects of market volatilities on Ubiquitech Software and Khiron Life 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 Ubiquitech Software with a short position of Khiron Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubiquitech Software and Khiron Life.

Diversification Opportunities for Ubiquitech Software and Khiron Life

-0.11

Correlation Coefficient

Ubiquitech Software  Khiron Life

Good diversification

The 3 months correlation between Ubiquitech and Khiron is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ubiquitech Software and Khiron Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khiron Life Sciences and Ubiquitech Software 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 Ubiquitech Software are associated (or correlated) with Khiron Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khiron Life Sciences has no effect on the direction of Ubiquitech Software i.e., Ubiquitech Software and Khiron Life go up and down completely randomly.

Pair Corralation between Ubiquitech Software and Khiron Life

Given the investment horizon of 90 days Ubiquitech Software is expected to generate 2.85 times more return on investment than Khiron Life. However, Ubiquitech Software is 2.85 times more volatile than Khiron Life Sciences. It trades about 0.36 of its potential returns per unit of risk. Khiron Life Sciences is currently generating about 0.13 per unit of risk. If you would invest  0.01  in Ubiquitech Software on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Ubiquitech Software 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

Ubiquitech Software  vs.  Khiron Life Sciences

Ubiquitech Software

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Ubiquitech Software are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Ubiquitech Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Khiron Life Sciences

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Khiron Life Sciences are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Khiron Life reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ubiquitech Software and Khiron Life

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

The idea behind Ubiquitech Software and Khiron Life Sciences 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.