Correlation Between UF Games and Kruk SA

Can any of the company-specific risk be diversified away by investing in both UF Games and Kruk SA 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 UF Games and Kruk SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for UF Games and Kruk SA

0.19

Correlation Coefficient

UF Games  Kruk SA

Average diversification

The 3 months correlation between UFG and Kruk is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding UF Games SA and Kruk SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kruk SA and UF Games 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 UF Games SA are associated (or correlated) with Kruk SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kruk SA has no effect on the direction of UF Games i.e., UF Games and Kruk SA go up and down completely randomly.

Pair Corralation between UF Games and Kruk SA

Assuming the 90 days trading horizon UF Games SA is expected to under-perform the Kruk SA. In addition to that, UF Games is 1.58 times more volatile than Kruk SA. It trades about -0.17 of its total potential returns per unit of risk. Kruk SA is currently generating about 0.03 per unit of volatility. If you would invest  42,420  in Kruk SA on September 15, 2024 and sell it today you would earn a total of  1,040  from holding Kruk SA or generate 2.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	76.19%
Values	Daily Returns

UF Games SA  vs.  Kruk SA

UF Games SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UF Games SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Kruk SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kruk SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Kruk SA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with UF Games and Kruk SA

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

The idea behind UF Games SA and Kruk 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.

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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.