Correlation Between Uniinfo Telecom and Indian Energy

Can any of the company-specific risk be diversified away by investing in both Uniinfo Telecom and Indian Energy 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 Indian Energy 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 Indian Energy Exchange, you can compare the effects of market volatilities on Uniinfo Telecom and Indian Energy 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 Indian Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniinfo Telecom and Indian Energy.

Diversification Opportunities for Uniinfo Telecom and Indian Energy

0.74

Correlation Coefficient

Uniinfo Telecom  Indian Energy

Poor diversification

The 3 months correlation between Uniinfo and Indian is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Uniinfo Telecom Services and Indian Energy Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Energy Exchange 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 Indian Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Energy Exchange has no effect on the direction of Uniinfo Telecom i.e., Uniinfo Telecom and Indian Energy go up and down completely randomly.

Pair Corralation between Uniinfo Telecom and Indian Energy

Assuming the 90 days trading horizon Uniinfo Telecom Services is expected to generate 1.19 times more return on investment than Indian Energy. However, Uniinfo Telecom is 1.19 times more volatile than Indian Energy Exchange. It trades about 0.0 of its potential returns per unit of risk. Indian Energy Exchange is currently generating about -0.09 per unit of risk. If you would invest  3,796  in Uniinfo Telecom Services on September 4, 2024 and sell it today you would lose (111.00) from holding Uniinfo Telecom Services or give up 2.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Uniinfo Telecom Services  vs.  Indian Energy Exchange

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 very healthy basic indicators, Uniinfo Telecom is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Indian Energy Exchange

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indian Energy Exchange has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain 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 Indian Energy

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

The idea behind Uniinfo Telecom Services and Indian Energy Exchange 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.