Correlation Between UOL Group and City Developments
Can any of the company-specific risk be diversified away by investing in both UOL Group and City Developments 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 City Developments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UOL Group Ltd and City Developments, you can compare the effects of market volatilities on UOL Group and City Developments 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 City Developments. Check out your portfolio center. Please also check ongoing floating volatility patterns of UOL Group and City Developments.
Diversification Opportunities for UOL Group and City Developments
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UOL and City is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding UOL Group Ltd and City Developments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Developments 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 Ltd are associated (or correlated) with City Developments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Developments has no effect on the direction of UOL Group i.e., UOL Group and City Developments go up and down completely randomly.
Pair Corralation between UOL Group and City Developments
Assuming the 90 days horizon UOL Group Ltd is expected to under-perform the City Developments. But the pink sheet apears to be less risky and, when comparing its historical volatility, UOL Group Ltd is 2.69 times less risky than City Developments. The pink sheet trades about -0.02 of its potential returns per unit of risk. The City Developments is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 429.00 in City Developments on January 31, 2024 and sell it today you would earn a total of 9.00 from holding City Developments or generate 2.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
UOL Group Ltd vs. City Developments
Performance |
Timeline |
UOL Group |
City Developments |
UOL Group and City Developments Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UOL Group and City Developments
The main advantage of trading using opposite UOL Group and City Developments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UOL Group position performs unexpectedly, City Developments 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 City Developments will offset losses from the drop in City Developments' long position.UOL Group vs. Holiday Island Holdings | UOL Group vs. The Allstate | UOL Group vs. CRA International | UOL Group vs. Aurora Cannabis |
City Developments vs. Holiday Island Holdings | City Developments vs. The Allstate | City Developments vs. CRA International | City Developments vs. Aurora Cannabis |
Check out your portfolio center.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |