Correlation Between Unitronics and Utron

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

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

Diversification Opportunities for Unitronics and Utron

0.11

Correlation Coefficient

Unitronics  Utron

Average diversification

The 3 months correlation between Unitronics and Utron is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Unitronics and Utron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Utron and Unitronics 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 Unitronics 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 Unitronics i.e., Unitronics and Utron go up and down completely randomly.

Pair Corralation between Unitronics and Utron

Assuming the 90 days trading horizon Unitronics is expected to under-perform the Utron. But the stock apears to be less risky and, when comparing its historical volatility, Unitronics is 1.1 times less risky than Utron. The stock trades about -0.05 of its potential returns per unit of risk. The Utron is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  45,900  in Utron on May 26, 2025 and sell it today you would earn a total of  5,470  from holding Utron or generate 11.92% return on investment over 90 days.

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

Unitronics  vs.  Utron

Unitronics

Risk-Adjusted Performance

Weakest

Over the last 90 days Unitronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Utron

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Utron are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Utron sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Unitronics and Utron

The main advantage of trading using opposite Unitronics and Utron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unitronics 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 Unitronics 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..