Correlation Between 465685AH8 and Universal Stainless

Can any of the company-specific risk be diversified away by investing in both 465685AH8 and Universal Stainless 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 465685AH8 and Universal Stainless into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ITC HLDGS P and Universal Stainless Alloy, you can compare the effects of market volatilities on 465685AH8 and Universal Stainless 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 465685AH8 with a short position of Universal Stainless. Check out your portfolio center. Please also check ongoing floating volatility patterns of 465685AH8 and Universal Stainless.

Diversification Opportunities for 465685AH8 and Universal Stainless

0.14

Correlation Coefficient

465685AH8  Universal Stainless

Average diversification

The 3 months correlation between 465685AH8 and Universal is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding ITC HLDGS P and Universal Stainless Alloy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Stainless Alloy and 465685AH8 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 ITC HLDGS P are associated (or correlated) with Universal Stainless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Stainless Alloy has no effect on the direction of 465685AH8 i.e., 465685AH8 and Universal Stainless go up and down completely randomly.

Pair Corralation between 465685AH8 and Universal Stainless

Assuming the 90 days trading horizon ITC HLDGS P is expected to generate 36.63 times more return on investment than Universal Stainless. However, 465685AH8 is 36.63 times more volatile than Universal Stainless Alloy. It trades about 0.11 of its potential returns per unit of risk. Universal Stainless Alloy is currently generating about 0.12 per unit of risk. If you would invest  9,691  in ITC HLDGS P on October 9, 2024 and sell it today you would lose (155.00) from holding ITC HLDGS P or give up 1.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	41.33%
Values	Daily Returns

ITC HLDGS P  vs.  Universal Stainless Alloy

ITC HLDGS P

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ITC HLDGS P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 465685AH8 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Universal Stainless Alloy

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Stainless Alloy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Universal Stainless may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with 465685AH8 and Universal Stainless

The main advantage of trading using opposite 465685AH8 and Universal Stainless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 465685AH8 position performs unexpectedly, Universal Stainless 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 Universal Stainless will offset losses from the drop in Universal Stainless' long position.

The idea behind ITC HLDGS P and Universal Stainless Alloy 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.