Correlation Between UTime and Superior Uniform

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

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

Diversification Opportunities for UTime and Superior Uniform

0.79

Correlation Coefficient

UTime  Superior Uniform

Poor diversification

The 3 months correlation between UTime and Superior is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding UTime Limited and Superior Uniform Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Uniform and UTime 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 UTime Limited are associated (or correlated) with Superior Uniform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Uniform has no effect on the direction of UTime i.e., UTime and Superior Uniform go up and down completely randomly.

Pair Corralation between UTime and Superior Uniform

Considering the 90-day investment horizon UTime Limited is expected to under-perform the Superior Uniform. In addition to that, UTime is 2.39 times more volatile than Superior Uniform Group. It trades about -0.12 of its total potential returns per unit of risk. Superior Uniform Group is currently generating about -0.2 per unit of volatility. If you would invest  1,596  in Superior Uniform Group on December 28, 2024 and sell it today you would lose (484.00) from holding Superior Uniform Group or give up 30.33% of portfolio value over 90 days.

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

UTime Limited  vs.  Superior Uniform Group

UTime Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days UTime Limited 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 basic 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.

Superior Uniform

Risk-Adjusted Performance

Very Weak

Over the last 90 days Superior Uniform Group 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with UTime and Superior Uniform

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

The idea behind UTime Limited and Superior Uniform Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.