Correlation Between UNIVERSAL PARTNERS and UNITED BUS

Can any of the company-specific risk be diversified away by investing in both UNIVERSAL PARTNERS and UNITED BUS 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 UNITED BUS 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 UNITED BUS SERVICE, you can compare the effects of market volatilities on UNIVERSAL PARTNERS and UNITED BUS 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 UNITED BUS. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVERSAL PARTNERS and UNITED BUS.

Diversification Opportunities for UNIVERSAL PARTNERS and UNITED BUS

1.0

Correlation Coefficient

UNIVERSAL PARTNERS  UNITED BUS

No risk reduction

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

Pair Corralation between UNIVERSAL PARTNERS and UNITED BUS

If you would invest  4,160  in UNITED BUS SERVICE on October 11, 2024 and sell it today you would earn a total of  0.00  from holding UNITED BUS SERVICE or generate 0.0% return on investment over 90 days.

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

UNIVERSAL PARTNERS LTD  vs.  UNITED BUS SERVICE

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.

UNITED BUS SERVICE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with UNIVERSAL PARTNERS and UNITED BUS

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

The idea behind UNIVERSAL PARTNERS LTD and UNITED BUS SERVICE 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..