Correlation Between Upsales Technology and Unibap AB

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

Diversification Opportunities for Upsales Technology and Unibap AB

-0.56

Correlation Coefficient

Upsales Technology  Unibap AB

Excellent diversification

The 3 months correlation between Upsales and Unibap is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Upsales Technology AB and Unibap AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unibap AB 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 Unibap AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unibap AB has no effect on the direction of Upsales Technology i.e., Upsales Technology and Unibap AB go up and down completely randomly.

Pair Corralation between Upsales Technology and Unibap AB

Assuming the 90 days trading horizon Upsales Technology AB is expected to generate 0.56 times more return on investment than Unibap AB. However, Upsales Technology AB is 1.78 times less risky than Unibap AB. It trades about -0.04 of its potential returns per unit of risk. Unibap AB is currently generating about -0.02 per unit of risk. If you would invest  7,051  in Upsales Technology AB on September 26, 2024 and sell it today you would lose (4,051) from holding Upsales Technology AB or give up 57.45% of portfolio value over 90 days.

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

Upsales Technology AB  vs.  Unibap 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 uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Unibap AB

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unibap AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward indicators, Unibap AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Upsales Technology and Unibap AB

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

The idea behind Upsales Technology AB and Unibap 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.