Correlation Between Uzinexport and Promateris

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

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

Diversification Opportunities for Uzinexport and Promateris

0.37

Correlation Coefficient

Uzinexport  Promateris

Weak diversification

The 3 months correlation between Uzinexport and Promateris is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Uzinexport SA and Promateris SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promateris SA and Uzinexport 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 Uzinexport SA are associated (or correlated) with Promateris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promateris SA has no effect on the direction of Uzinexport i.e., Uzinexport and Promateris go up and down completely randomly.

Pair Corralation between Uzinexport and Promateris

Assuming the 90 days trading horizon Uzinexport SA is expected to generate 2.4 times more return on investment than Promateris. However, Uzinexport is 2.4 times more volatile than Promateris SA. It trades about 0.04 of its potential returns per unit of risk. Promateris SA is currently generating about -0.02 per unit of risk. If you would invest  52.00  in Uzinexport SA on October 10, 2024 and sell it today you would lose (2.00) from holding Uzinexport SA or give up 3.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	59.29%
Values	Daily Returns

Uzinexport SA  vs.  Promateris SA

Uzinexport SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uzinexport SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Uzinexport is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Promateris SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Promateris SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential 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 Uzinexport and Promateris

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

The idea behind Uzinexport SA and Promateris SA 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.