Correlation Between Sri Trang and Ubis Public

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

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

Diversification Opportunities for Sri Trang and Ubis Public

0.41

Correlation Coefficient

Sri Trang  Ubis Public

Very weak diversification

The 3 months correlation between Sri and Ubis is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sri Trang Gloves and Ubis Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubis Public and Sri Trang 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 Sri Trang Gloves are associated (or correlated) with Ubis Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubis Public has no effect on the direction of Sri Trang i.e., Sri Trang and Ubis Public go up and down completely randomly.

Pair Corralation between Sri Trang and Ubis Public

Assuming the 90 days trading horizon Sri Trang Gloves is expected to generate 2.17 times more return on investment than Ubis Public. However, Sri Trang is 2.17 times more volatile than Ubis Public. It trades about 0.18 of its potential returns per unit of risk. Ubis Public is currently generating about -0.2 per unit of risk. If you would invest  836.00  in Sri Trang Gloves on February 3, 2024 and sell it today you would earn a total of  69.00  from holding Sri Trang Gloves or generate 8.25% return on investment over 90 days.

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

Sri Trang Gloves  vs.  Ubis Public

Sri Trang Gloves

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sri Trang Gloves are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Sri Trang disclosed solid returns over the last few months and may actually be approaching a breakup point.

Ubis Public

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ubis Public are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Ubis Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Sri Trang and Ubis Public

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

The idea behind Sri Trang Gloves and Ubis Public 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.