Correlation Between UNIPHAR PLC and Ring Energy

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

By analyzing existing cross correlation between UNIPHAR PLC EO and Ring Energy, you can compare the effects of market volatilities on UNIPHAR PLC and Ring Energy 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 UNIPHAR PLC with a short position of Ring Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIPHAR PLC and Ring Energy.

Diversification Opportunities for UNIPHAR PLC and Ring Energy

-0.58

Correlation Coefficient

UNIPHAR PLC  Ring Energy

Excellent diversification

The 3 months correlation between UNIPHAR and Ring is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding UNIPHAR PLC EO and Ring Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ring Energy and UNIPHAR PLC 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 UNIPHAR PLC EO are associated (or correlated) with Ring Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ring Energy has no effect on the direction of UNIPHAR PLC i.e., UNIPHAR PLC and Ring Energy go up and down completely randomly.

Pair Corralation between UNIPHAR PLC and Ring Energy

Assuming the 90 days horizon UNIPHAR PLC EO is expected to generate 0.57 times more return on investment than Ring Energy. However, UNIPHAR PLC EO is 1.74 times less risky than Ring Energy. It trades about 0.23 of its potential returns per unit of risk. Ring Energy is currently generating about -0.05 per unit of risk. If you would invest  259.00  in UNIPHAR PLC EO on April 20, 2025 and sell it today you would earn a total of  102.00  from holding UNIPHAR PLC EO or generate 39.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

UNIPHAR PLC EO  vs.  Ring Energy

UNIPHAR PLC EO

Risk-Adjusted Performance

Solid

Over the last 90 days UNIPHAR PLC EO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, UNIPHAR PLC reported solid returns over the last few months and may actually be approaching a breakup point.

Ring Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ring Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with UNIPHAR PLC and Ring Energy

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

The idea behind UNIPHAR PLC EO and Ring Energy 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.