Correlation Between UCO Bank and Diligent Media

Can any of the company-specific risk be diversified away by investing in both UCO Bank and Diligent Media 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 UCO Bank and Diligent Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for UCO Bank and Diligent Media

0.36

Correlation Coefficient

UCO Bank  Diligent Media

Weak diversification

The 3 months correlation between UCO and Diligent is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding UCO Bank and Diligent Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diligent Media and UCO Bank 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 UCO Bank are associated (or correlated) with Diligent Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diligent Media has no effect on the direction of UCO Bank i.e., UCO Bank and Diligent Media go up and down completely randomly.

Pair Corralation between UCO Bank and Diligent Media

Assuming the 90 days trading horizon UCO Bank is expected to under-perform the Diligent Media. But the stock apears to be less risky and, when comparing its historical volatility, UCO Bank is 1.79 times less risky than Diligent Media. The stock trades about -0.06 of its potential returns per unit of risk. The Diligent Media is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  524.00  in Diligent Media on September 29, 2024 and sell it today you would earn a total of  114.00  from holding Diligent Media or generate 21.76% return on investment over 90 days.

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

UCO Bank  vs.  Diligent Media

UCO Bank

Risk-Adjusted Performance

0 of 100

Very Weak

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

Diligent Media

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Diligent Media are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental indicators, Diligent Media demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UCO Bank and Diligent Media

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

The idea behind UCO Bank and Diligent Media 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.