Correlation Between Universal Electronics and HEAR Old

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

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

Diversification Opportunities for Universal Electronics and HEAR Old

0.0

Correlation Coefficient

Universal Electronics  HEAR Old

Pay attention - limited upside

The 3 months correlation between Universal and HEAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Universal Electronics and HEAR Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEAR Old and Universal Electronics 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 Electronics are associated (or correlated) with HEAR Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEAR Old has no effect on the direction of Universal Electronics i.e., Universal Electronics and HEAR Old go up and down completely randomly.

Pair Corralation between Universal Electronics and HEAR Old

If you would invest  532.00  in Universal Electronics on May 5, 2025 and sell it today you would earn a total of  96.00  from holding Universal Electronics or generate 18.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Universal Electronics  vs.  HEAR Old

Universal Electronics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Electronics are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting forward indicators, Universal Electronics exhibited solid returns over the last few months and may actually be approaching a breakup point.

HEAR Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days HEAR Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, HEAR Old is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Universal Electronics and HEAR Old

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

The idea behind Universal Electronics and HEAR Old 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.