Correlation Between Uniinfo Telecom and HMT

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

By analyzing existing cross correlation between Uniinfo Telecom Services and HMT Limited, you can compare the effects of market volatilities on Uniinfo Telecom and HMT 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 Uniinfo Telecom with a short position of HMT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniinfo Telecom and HMT.

Diversification Opportunities for Uniinfo Telecom and HMT

0.48

Correlation Coefficient

Uniinfo Telecom  HMT

Very weak diversification

The 3 months correlation between Uniinfo and HMT is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Uniinfo Telecom Services and HMT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMT Limited and Uniinfo Telecom 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 Uniinfo Telecom Services are associated (or correlated) with HMT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMT Limited has no effect on the direction of Uniinfo Telecom i.e., Uniinfo Telecom and HMT go up and down completely randomly.

Pair Corralation between Uniinfo Telecom and HMT

Assuming the 90 days trading horizon Uniinfo Telecom is expected to generate 1.42 times less return on investment than HMT. In addition to that, Uniinfo Telecom is 1.49 times more volatile than HMT Limited. It trades about 0.04 of its total potential returns per unit of risk. HMT Limited is currently generating about 0.09 per unit of volatility. If you would invest  2,850  in HMT Limited on September 30, 2024 and sell it today you would earn a total of  3,582  from holding HMT Limited or generate 125.68% return on investment over 90 days.

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

Uniinfo Telecom Services  vs.  HMT Limited

Uniinfo Telecom Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniinfo Telecom Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

HMT Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HMT Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Uniinfo Telecom and HMT

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

The idea behind Uniinfo Telecom Services and HMT Limited 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.