Correlation Between Utron and EN Shoham

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

By analyzing existing cross correlation between Utron and EN Shoham Business, you can compare the effects of market volatilities on Utron and EN Shoham 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 Utron with a short position of EN Shoham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Utron and EN Shoham.

Diversification Opportunities for Utron and EN Shoham

-0.24

Correlation Coefficient

Utron  EN Shoham

Very good diversification

The 3 months correlation between Utron and SHOM is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Utron and EN Shoham Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EN Shoham Business and Utron 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 Utron are associated (or correlated) with EN Shoham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EN Shoham Business has no effect on the direction of Utron i.e., Utron and EN Shoham go up and down completely randomly.

Pair Corralation between Utron and EN Shoham

Assuming the 90 days trading horizon Utron is expected to generate 1.31 times more return on investment than EN Shoham. However, Utron is 1.31 times more volatile than EN Shoham Business. It trades about 0.25 of its potential returns per unit of risk. EN Shoham Business is currently generating about 0.05 per unit of risk. If you would invest  47,510  in Utron on December 30, 2024 and sell it today you would earn a total of  19,490  from holding Utron or generate 41.02% return on investment over 90 days.

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

Utron  vs.  EN Shoham Business

Utron

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Utron are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Utron sustained solid returns over the last few months and may actually be approaching a breakup point.

EN Shoham Business

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Utron and EN Shoham

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

The idea behind Utron and EN Shoham Business 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.