Correlation Between Universal Robina and Lery Seafood

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Can any of the company-specific risk be diversified away by investing in both Universal Robina and Lery Seafood 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 Universal Robina and Lery Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Robina Corp and Lery Seafood Group, you can compare the effects of market volatilities on Universal Robina and Lery Seafood 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 Universal Robina with a short position of Lery Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Robina and Lery Seafood.

Diversification Opportunities for Universal Robina and Lery Seafood

0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Universal and Lery is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Universal Robina Corp and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group and Universal Robina 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 Universal Robina Corp are associated (or correlated) with Lery Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Universal Robina i.e., Universal Robina and Lery Seafood go up and down completely randomly.

Pair Corralation between Universal Robina and Lery Seafood

Assuming the 90 days horizon Universal Robina Corp is expected to generate 2.88 times more return on investment than Lery Seafood. However, Universal Robina is 2.88 times more volatile than Lery Seafood Group. It trades about 0.01 of its potential returns per unit of risk. Lery Seafood Group is currently generating about 0.01 per unit of risk. If you would invest  2,609  in Universal Robina Corp on December 29, 2023 and sell it today you would lose (549.00) from holding Universal Robina Corp or give up 21.04% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.6%
ValuesDaily Returns

Universal Robina Corp  vs.  Lery Seafood Group

 Performance 
       Timeline  
Universal Robina Corp 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Universal Robina Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental drivers, Universal Robina may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Lery Seafood Group 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Lery Seafood Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Lery Seafood reported solid returns over the last few months and may actually be approaching a breakup point.

Universal Robina and Lery Seafood Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Universal Robina and Lery Seafood

The main advantage of trading using opposite Universal Robina and Lery Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Robina position performs unexpectedly, Lery Seafood 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 Lery Seafood will offset losses from the drop in Lery Seafood's long position.
The idea behind Universal Robina Corp and Lery Seafood 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.
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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