Correlation Between UTI Asset and Deepak Nitrite

Can any of the company-specific risk be diversified away by investing in both UTI Asset and Deepak Nitrite 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 UTI Asset and Deepak Nitrite into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UTI Asset Management and Deepak Nitrite Limited, you can compare the effects of market volatilities on UTI Asset and Deepak Nitrite 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 UTI Asset with a short position of Deepak Nitrite. Check out your portfolio center. Please also check ongoing floating volatility patterns of UTI Asset and Deepak Nitrite.

Diversification Opportunities for UTI Asset and Deepak Nitrite

-0.23

Correlation Coefficient

UTI Asset  Deepak Nitrite

Very good diversification

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

Pair Corralation between UTI Asset and Deepak Nitrite

Assuming the 90 days trading horizon UTI Asset Management is expected to generate 1.26 times more return on investment than Deepak Nitrite. However, UTI Asset is 1.26 times more volatile than Deepak Nitrite Limited. It trades about 0.1 of its potential returns per unit of risk. Deepak Nitrite Limited is currently generating about -0.03 per unit of risk. If you would invest  102,301  in UTI Asset Management on October 7, 2024 and sell it today you would earn a total of  33,919  from holding UTI Asset Management or generate 33.16% return on investment over 90 days.

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

UTI Asset Management  vs.  Deepak Nitrite Limited

UTI Asset Management

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UTI Asset Management are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, UTI Asset sustained solid returns over the last few months and may actually be approaching a breakup point.

Deepak Nitrite

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deepak Nitrite Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with UTI Asset and Deepak Nitrite

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

The idea behind UTI Asset Management and Deepak Nitrite Limited 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.