Correlation Between Upsales Technology and Cinis Fertilizer

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

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

Diversification Opportunities for Upsales Technology and Cinis Fertilizer

0.44

Correlation Coefficient

Upsales Technology  Cinis Fertilizer

Very weak diversification

The 3 months correlation between Upsales and Cinis is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Upsales Technology AB and Cinis Fertilizer AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cinis Fertilizer and Upsales Technology 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 Upsales Technology AB are associated (or correlated) with Cinis Fertilizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cinis Fertilizer has no effect on the direction of Upsales Technology i.e., Upsales Technology and Cinis Fertilizer go up and down completely randomly.

Pair Corralation between Upsales Technology and Cinis Fertilizer

Assuming the 90 days trading horizon Upsales Technology AB is expected to generate 0.9 times more return on investment than Cinis Fertilizer. However, Upsales Technology AB is 1.11 times less risky than Cinis Fertilizer. It trades about -0.03 of its potential returns per unit of risk. Cinis Fertilizer AB is currently generating about -0.07 per unit of risk. If you would invest  6,550  in Upsales Technology AB on October 9, 2024 and sell it today you would lose (3,350) from holding Upsales Technology AB or give up 51.15% of portfolio value over 90 days.

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

Upsales Technology AB  vs.  Cinis Fertilizer AB

Upsales Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Upsales Technology AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Upsales Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cinis Fertilizer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cinis Fertilizer AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Upsales Technology and Cinis Fertilizer

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

The idea behind Upsales Technology AB and Cinis Fertilizer AB 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.