Correlation Between UOL Group and Acacia Pharma

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Can any of the company-specific risk be diversified away by investing in both UOL Group and Acacia Pharma 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 UOL Group and Acacia Pharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UOL Group and Acacia Pharma Group, you can compare the effects of market volatilities on UOL Group and Acacia Pharma 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 UOL Group with a short position of Acacia Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of UOL Group and Acacia Pharma.

Diversification Opportunities for UOL Group and Acacia Pharma

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between UOL Group and Acacia Pharma

If you would invest (100.00) in Acacia Pharma Group on December 29, 2023 and sell it today you would earn a total of  100.00  from holding Acacia Pharma Group or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

UOL Group Ltd  vs.  Acacia Pharma Group

 Performance 
       Timeline  
UOL Group 

Risk-Adjusted Performance

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Over the last 90 days UOL Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Acacia Pharma Group 

Risk-Adjusted Performance

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Over the last 90 days Acacia Pharma Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Acacia Pharma is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

UOL Group and Acacia Pharma Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with UOL Group and Acacia Pharma

The main advantage of trading using opposite UOL Group and Acacia Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UOL Group position performs unexpectedly, Acacia Pharma 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 Acacia Pharma will offset losses from the drop in Acacia Pharma's long position.
The idea behind UOL Group and Acacia Pharma Group 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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