Correlation Between UPP and Hivemapper

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

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

Diversification Opportunities for UPP and Hivemapper

0.15

Correlation Coefficient

UPP  Hivemapper

Average diversification

The 3 months correlation between UPP and Hivemapper is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding UPP and Hivemapper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hivemapper and UPP 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 UPP are associated (or correlated) with Hivemapper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hivemapper has no effect on the direction of UPP i.e., UPP and Hivemapper go up and down completely randomly.

Pair Corralation between UPP and Hivemapper

Assuming the 90 days trading horizon UPP is expected to generate 4.26 times more return on investment than Hivemapper. However, UPP is 4.26 times more volatile than Hivemapper. It trades about 0.09 of its potential returns per unit of risk. Hivemapper is currently generating about -0.02 per unit of risk. If you would invest  8.80  in UPP on November 27, 2024 and sell it today you would earn a total of  0.09  from holding UPP or generate 1.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

UPP  vs.  Hivemapper

UPP

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UPP are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, UPP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hivemapper

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hivemapper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for Hivemapper shareholders.

Pair Trading with UPP and Hivemapper

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

The idea behind UPP and Hivemapper 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.