Correlation Between United Bankers and Aiforia Technologies

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

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

Diversification Opportunities for United Bankers and Aiforia Technologies

-0.2

Correlation Coefficient

United Bankers  Aiforia Technologies

Good diversification

The 3 months correlation between United and Aiforia is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding United Bankers Oyj and Aiforia Technologies Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aiforia Technologies Oyj and United Bankers 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 United Bankers Oyj are associated (or correlated) with Aiforia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aiforia Technologies Oyj has no effect on the direction of United Bankers i.e., United Bankers and Aiforia Technologies go up and down completely randomly.

Pair Corralation between United Bankers and Aiforia Technologies

Assuming the 90 days trading horizon United Bankers is expected to generate 1.96 times less return on investment than Aiforia Technologies. But when comparing it to its historical volatility, United Bankers Oyj is 1.41 times less risky than Aiforia Technologies. It trades about 0.03 of its potential returns per unit of risk. Aiforia Technologies Oyj is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  351.00  in Aiforia Technologies Oyj on December 30, 2024 and sell it today you would earn a total of  16.00  from holding Aiforia Technologies Oyj or generate 4.56% return on investment over 90 days.

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

United Bankers Oyj  vs.  Aiforia Technologies Oyj

United Bankers Oyj

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in United Bankers Oyj are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, United Bankers is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Aiforia Technologies Oyj

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aiforia Technologies Oyj are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aiforia Technologies may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with United Bankers and Aiforia Technologies

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

The idea behind United Bankers Oyj and Aiforia Technologies Oyj 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.