Correlation Between Universal Stainless and Aperam PK

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

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

Diversification Opportunities for Universal Stainless and Aperam PK

-0.23

Correlation Coefficient

Universal Stainless  Aperam PK

Very good diversification

The 3 months correlation between Universal and Aperam is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Universal Stainless Alloy and Aperam PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aperam PK and Universal Stainless 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 Universal Stainless Alloy are associated (or correlated) with Aperam PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aperam PK has no effect on the direction of Universal Stainless i.e., Universal Stainless and Aperam PK go up and down completely randomly.

Pair Corralation between Universal Stainless and Aperam PK

Given the investment horizon of 90 days Universal Stainless Alloy is expected to generate 1.09 times more return on investment than Aperam PK. However, Universal Stainless is 1.09 times more volatile than Aperam PK. It trades about 0.12 of its potential returns per unit of risk. Aperam PK is currently generating about 0.0 per unit of risk. If you would invest  765.00  in Universal Stainless Alloy on September 28, 2024 and sell it today you would earn a total of  3,635  from holding Universal Stainless Alloy or generate 475.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.54%
Values	Daily Returns

Universal Stainless Alloy  vs.  Aperam PK

Universal Stainless Alloy

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Stainless Alloy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Universal Stainless reported solid returns over the last few months and may actually be approaching a breakup point.

Aperam PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aperam PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Universal Stainless and Aperam PK

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

The idea behind Universal Stainless Alloy and Aperam PK 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..