Correlation Between Ushio and Amaero International

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

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

Diversification Opportunities for Ushio and Amaero International

0.03

Correlation Coefficient

Ushio  Amaero International

Significant diversification

The 3 months correlation between Ushio and Amaero is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ushio Inc and Amaero International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amaero International and Ushio 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 Ushio Inc are associated (or correlated) with Amaero International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amaero International has no effect on the direction of Ushio i.e., Ushio and Amaero International go up and down completely randomly.

Pair Corralation between Ushio and Amaero International

Assuming the 90 days horizon Ushio Inc is expected to generate 0.48 times more return on investment than Amaero International. However, Ushio Inc is 2.1 times less risky than Amaero International. It trades about 0.01 of its potential returns per unit of risk. Amaero International is currently generating about -0.16 per unit of risk. If you would invest  1,302  in Ushio Inc on September 14, 2024 and sell it today you would lose (2.00) from holding Ushio Inc or give up 0.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Ushio Inc  vs.  Amaero International

Ushio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ushio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Ushio is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Amaero International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amaero International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Ushio and Amaero International

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

The idea behind Ushio Inc and Amaero International 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.