Correlation Between Universal Stainless and Quanergy Systems

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

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

Diversification Opportunities for Universal Stainless and Quanergy Systems

-0.62

Correlation Coefficient

Universal Stainless  Quanergy Systems

Excellent diversification

The 3 months correlation between Universal and Quanergy is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Universal Stainless Alloy and Quanergy Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quanergy Systems and Universal Stainless 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 Stainless Alloy are associated (or correlated) with Quanergy Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quanergy Systems has no effect on the direction of Universal Stainless i.e., Universal Stainless and Quanergy Systems go up and down completely randomly.

Pair Corralation between Universal Stainless and Quanergy Systems

If you would invest  4,230  in Universal Stainless Alloy on July 25, 2024 and sell it today you would earn a total of  127.00  from holding Universal Stainless Alloy or generate 3.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	2.44%
Values	Daily Returns

Universal Stainless Alloy  vs.  Quanergy Systems

Universal Stainless Alloy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Stainless Alloy are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Universal Stainless reported solid returns over the last few months and may actually be approaching a breakup point.

Quanergy Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quanergy Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Quanergy Systems 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 Stainless and Quanergy Systems

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

The idea behind Universal Stainless Alloy and Quanergy Systems 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.