Correlation Between SOS and UTime

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

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

Diversification Opportunities for SOS and UTime

-0.48

Correlation Coefficient

SOS  UTime

Very good diversification

The 3 months correlation between SOS and UTime is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SOS Limited and UTime Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTime Limited and SOS 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 SOS Limited are associated (or correlated) with UTime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTime Limited has no effect on the direction of SOS i.e., SOS and UTime go up and down completely randomly.

Pair Corralation between SOS and UTime

Considering the 90-day investment horizon SOS Limited is expected to generate 0.68 times more return on investment than UTime. However, SOS Limited is 1.46 times less risky than UTime. It trades about 0.19 of its potential returns per unit of risk. UTime Limited is currently generating about 0.03 per unit of risk. If you would invest  423.00  in SOS Limited on April 20, 2025 and sell it today you would earn a total of  390.00  from holding SOS Limited or generate 92.2% return on investment over 90 days.

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

SOS Limited  vs.  UTime Limited

SOS Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SOS Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SOS unveiled solid returns over the last few months and may actually be approaching a breakup point.

UTime Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UTime Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, UTime displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SOS and UTime

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

The idea behind SOS Limited and UTime Limited 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.