Correlation Between UTI Asset and Selan Exploration

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

Diversification Opportunities for UTI Asset and Selan Exploration

0.95

Correlation Coefficient

UTI Asset  Selan Exploration

Almost no diversification

The 3 months correlation between UTI and Selan is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding UTI Asset Management and Selan Exploration Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selan Exploration 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 Selan Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selan Exploration has no effect on the direction of UTI Asset i.e., UTI Asset and Selan Exploration go up and down completely randomly.

Pair Corralation between UTI Asset and Selan Exploration

Assuming the 90 days trading horizon UTI Asset Management is expected to generate 0.74 times more return on investment than Selan Exploration. However, UTI Asset Management is 1.35 times less risky than Selan Exploration. It trades about -0.06 of its potential returns per unit of risk. Selan Exploration Technology is currently generating about -0.08 per unit of risk. If you would invest  123,090  in UTI Asset Management on December 23, 2024 and sell it today you would lose (16,070) from holding UTI Asset Management or give up 13.06% of portfolio value over 90 days.

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

UTI Asset Management  vs.  Selan Exploration Technology

UTI Asset Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days UTI Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Selan Exploration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Selan Exploration Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with UTI Asset and Selan Exploration

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

The idea behind UTI Asset Management and Selan Exploration Technology 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.