Correlation Between Universe Pharmaceuticals and Cannara Biotech

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

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

Diversification Opportunities for Universe Pharmaceuticals and Cannara Biotech

-0.51

Correlation Coefficient

Universe Pharmaceuticals  Cannara Biotech

Excellent diversification

The 3 months correlation between Universe and Cannara is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Universe Pharmaceuticals and Cannara Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannara Biotech and Universe Pharmaceuticals 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 Universe Pharmaceuticals are associated (or correlated) with Cannara Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannara Biotech has no effect on the direction of Universe Pharmaceuticals i.e., Universe Pharmaceuticals and Cannara Biotech go up and down completely randomly.

Pair Corralation between Universe Pharmaceuticals and Cannara Biotech

Considering the 90-day investment horizon Universe Pharmaceuticals is expected to under-perform the Cannara Biotech. In addition to that, Universe Pharmaceuticals is 1.73 times more volatile than Cannara Biotech. It trades about -0.05 of its total potential returns per unit of risk. Cannara Biotech is currently generating about 0.15 per unit of volatility. If you would invest  101.00  in Cannara Biotech on May 6, 2025 and sell it today you would earn a total of  33.00  from holding Cannara Biotech or generate 32.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Universe Pharmaceuticals  vs.  Cannara Biotech

Universe Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Universe Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Cannara Biotech

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cannara Biotech are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Cannara Biotech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Universe Pharmaceuticals and Cannara Biotech

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

The idea behind Universe Pharmaceuticals and Cannara Biotech 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.