Correlation Between UNIVERSAL PARTNERS and AGAPE GLOBAL

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

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

Diversification Opportunities for UNIVERSAL PARTNERS and AGAPE GLOBAL

1.0

Correlation Coefficient

UNIVERSAL PARTNERS  AGAPE GLOBAL

No risk reduction

The 3 months correlation between UNIVERSAL and AGAPE is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL PARTNERS LTD and AGAPE GLOBAL INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGAPE GLOBAL INVESTMENTS and UNIVERSAL PARTNERS 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 UNIVERSAL PARTNERS LTD are associated (or correlated) with AGAPE GLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGAPE GLOBAL INVESTMENTS has no effect on the direction of UNIVERSAL PARTNERS i.e., UNIVERSAL PARTNERS and AGAPE GLOBAL go up and down completely randomly.

Pair Corralation between UNIVERSAL PARTNERS and AGAPE GLOBAL

Assuming the 90 days trading horizon UNIVERSAL PARTNERS LTD is expected to generate 0.4 times more return on investment than AGAPE GLOBAL. However, UNIVERSAL PARTNERS LTD is 2.48 times less risky than AGAPE GLOBAL. It trades about -0.05 of its potential returns per unit of risk. AGAPE GLOBAL INVESTMENTS is currently generating about -0.07 per unit of risk. If you would invest  100.00  in UNIVERSAL PARTNERS LTD on October 10, 2024 and sell it today you would lose (10.00) from holding UNIVERSAL PARTNERS LTD or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	74.13%
Values	Daily Returns

UNIVERSAL PARTNERS LTD  vs.  AGAPE GLOBAL INVESTMENTS

UNIVERSAL PARTNERS LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNIVERSAL PARTNERS LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, UNIVERSAL PARTNERS is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

AGAPE GLOBAL INVESTMENTS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AGAPE GLOBAL INVESTMENTS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, AGAPE GLOBAL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with UNIVERSAL PARTNERS and AGAPE GLOBAL

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

The idea behind UNIVERSAL PARTNERS LTD and AGAPE GLOBAL INVESTMENTS 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.