Correlation Between Automatic Bank and Utron

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

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

Diversification Opportunities for Automatic Bank and Utron

0.05

Correlation Coefficient

Automatic Bank  Utron

Significant diversification

The 3 months correlation between Automatic and Utron is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Bank Services and Utron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utron and Automatic Bank 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 Automatic Bank Services are associated (or correlated) with Utron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Utron has no effect on the direction of Automatic Bank i.e., Automatic Bank and Utron go up and down completely randomly.

Pair Corralation between Automatic Bank and Utron

Assuming the 90 days trading horizon Automatic Bank Services is expected to generate 0.92 times more return on investment than Utron. However, Automatic Bank Services is 1.09 times less risky than Utron. It trades about -0.02 of its potential returns per unit of risk. Utron is currently generating about -0.18 per unit of risk. If you would invest  226,600  in Automatic Bank Services on May 3, 2025 and sell it today you would lose (10,900) from holding Automatic Bank Services or give up 4.81% of portfolio value over 90 days.

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

Automatic Bank Services  vs.  Utron

Automatic Bank Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Automatic Bank Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Automatic Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Utron

Risk-Adjusted Performance

Very Weak

Over the last 90 days Utron has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Automatic Bank and Utron

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

The idea behind Automatic Bank Services and Utron 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.