Correlation Between UTI Asset and Union Bank

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

Diversification Opportunities for UTI Asset and Union Bank

0.66

Correlation Coefficient

UTI Asset  Union Bank

Poor diversification

The 3 months correlation between UTI and Union is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding UTI Asset Management and Union Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank 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 Union Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Bank has no effect on the direction of UTI Asset i.e., UTI Asset and Union Bank go up and down completely randomly.

Pair Corralation between UTI Asset and Union Bank

Assuming the 90 days trading horizon UTI Asset Management is expected to generate 1.37 times more return on investment than Union Bank. However, UTI Asset is 1.37 times more volatile than Union Bank of. It trades about -0.12 of its potential returns per unit of risk. Union Bank of is currently generating about -0.32 per unit of risk. If you would invest  136,615  in UTI Asset Management on October 10, 2024 and sell it today you would lose (11,170) from holding UTI Asset Management or give up 8.18% of portfolio value over 90 days.

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

UTI Asset Management  vs.  Union Bank of

UTI Asset Management

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UTI Asset Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, UTI Asset may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Union Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Union Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Union Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with UTI Asset and Union Bank

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

The idea behind UTI Asset Management and Union Bank of 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.