Correlation Between URU Metals and Integrated Diagnostics

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

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

Diversification Opportunities for URU Metals and Integrated Diagnostics

0.2

Correlation Coefficient

URU Metals  Integrated Diagnostics

Modest diversification

The 3 months correlation between URU and Integrated is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding URU Metals and Integrated Diagnostics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Diagnostics and URU Metals 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 URU Metals are associated (or correlated) with Integrated Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Diagnostics has no effect on the direction of URU Metals i.e., URU Metals and Integrated Diagnostics go up and down completely randomly.

Pair Corralation between URU Metals and Integrated Diagnostics

Assuming the 90 days trading horizon URU Metals is expected to generate 1.24 times more return on investment than Integrated Diagnostics. However, URU Metals is 1.24 times more volatile than Integrated Diagnostics Holdings. It trades about 0.17 of its potential returns per unit of risk. Integrated Diagnostics Holdings is currently generating about 0.07 per unit of risk. If you would invest  10,500  in URU Metals on October 12, 2024 and sell it today you would earn a total of  5,500  from holding URU Metals or generate 52.38% return on investment over 90 days.

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

URU Metals  vs.  Integrated Diagnostics Holding

URU Metals

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in URU Metals are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, URU Metals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Integrated Diagnostics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Diagnostics Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Integrated Diagnostics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with URU Metals and Integrated Diagnostics

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

The idea behind URU Metals and Integrated Diagnostics Holdings 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.