Correlation Between Universal and ScanTech

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

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

Diversification Opportunities for Universal and ScanTech

0.04

Correlation Coefficient

Universal  ScanTech

Significant diversification

The 3 months correlation between Universal and ScanTech is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Universal and ScanTech AI Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanTech AI Systems and Universal 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 are associated (or correlated) with ScanTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanTech AI Systems has no effect on the direction of Universal i.e., Universal and ScanTech go up and down completely randomly.

Pair Corralation between Universal and ScanTech

Considering the 90-day investment horizon Universal is expected to generate 0.15 times more return on investment than ScanTech. However, Universal is 6.51 times less risky than ScanTech. It trades about -0.05 of its potential returns per unit of risk. ScanTech AI Systems is currently generating about -0.07 per unit of risk. If you would invest  5,793  in Universal on May 6, 2025 and sell it today you would lose (394.00) from holding Universal or give up 6.8% of portfolio value over 90 days.

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

Universal  vs.  ScanTech AI Systems

Universal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Universal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Universal is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ScanTech AI Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days ScanTech AI Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Universal and ScanTech

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

The idea behind Universal and ScanTech AI 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.