Correlation Between Unitronics and Matrix

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

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

Diversification Opportunities for Unitronics and Matrix

-0.38

Correlation Coefficient

Unitronics  Matrix

Very good diversification

The 3 months correlation between Unitronics and Matrix is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Unitronics and Matrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matrix and Unitronics 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 Unitronics are associated (or correlated) with Matrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matrix has no effect on the direction of Unitronics i.e., Unitronics and Matrix go up and down completely randomly.

Pair Corralation between Unitronics and Matrix

Assuming the 90 days trading horizon Unitronics is expected to generate 1.89 times less return on investment than Matrix. In addition to that, Unitronics is 2.44 times more volatile than Matrix. It trades about 0.07 of its total potential returns per unit of risk. Matrix is currently generating about 0.31 per unit of volatility. If you would invest  700,329  in Matrix on October 9, 2024 and sell it today you would earn a total of  166,171  from holding Matrix or generate 23.73% return on investment over 90 days.

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

Unitronics  vs.  Matrix

Unitronics

Risk-Adjusted Performance

5 of 100

Modest

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

Matrix

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Matrix are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Matrix sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Unitronics and Matrix

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

The idea behind Unitronics and Matrix 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.