Correlation Between IShares Expanded and Universal Robina

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

By analyzing existing cross correlation between iShares Expanded Tech and Universal Robina Corp, you can compare the effects of market volatilities on IShares Expanded and Universal Robina 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 IShares Expanded with a short position of Universal Robina. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Expanded and Universal Robina.

Diversification Opportunities for IShares Expanded and Universal Robina

-0.69

Correlation Coefficient

IShares Expanded  Universal Robina

Excellent diversification

The 3 months correlation between IShares and Universal is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding iShares Expanded Tech and Universal Robina Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Robina Corp and IShares Expanded 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 iShares Expanded Tech are associated (or correlated) with Universal Robina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Robina Corp has no effect on the direction of IShares Expanded i.e., IShares Expanded and Universal Robina go up and down completely randomly.

Pair Corralation between IShares Expanded and Universal Robina

Considering the 90-day investment horizon iShares Expanded Tech is expected to generate 0.36 times more return on investment than Universal Robina. However, iShares Expanded Tech is 2.78 times less risky than Universal Robina. It trades about 0.07 of its potential returns per unit of risk. Universal Robina Corp is currently generating about 0.02 per unit of risk. If you would invest  4,934  in iShares Expanded Tech on January 29, 2024 and sell it today you would earn a total of  3,433  from holding iShares Expanded Tech or generate 69.58% return on investment over 90 days.

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

iShares Expanded Tech  vs.  Universal Robina Corp

iShares Expanded Tech

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Expanded Tech are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, IShares Expanded is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Universal Robina Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Robina Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental drivers, Universal Robina is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Expanded and Universal Robina

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

The idea behind iShares Expanded Tech and Universal Robina Corp 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.