Correlation Between UNIVMUSIC GRPADR/050 and INNELEC MULTIMMINHEO153

Can any of the company-specific risk be diversified away by investing in both UNIVMUSIC GRPADR/050 and INNELEC MULTIMMINHEO153 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 UNIVMUSIC GRPADR/050 and INNELEC MULTIMMINHEO153 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNIVMUSIC GRPADR050 and INNELEC MULTIMMINHEO153, you can compare the effects of market volatilities on UNIVMUSIC GRPADR/050 and INNELEC MULTIMMINHEO153 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 UNIVMUSIC GRPADR/050 with a short position of INNELEC MULTIMMINHEO153. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVMUSIC GRPADR/050 and INNELEC MULTIMMINHEO153.

Diversification Opportunities for UNIVMUSIC GRPADR/050 and INNELEC MULTIMMINHEO153

0.47

Correlation Coefficient

UNIVMUSIC GRPADR/050  INNELEC MULTIMMINHEO153

Very weak diversification

The 3 months correlation between UNIVMUSIC and INNELEC is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding UNIVMUSIC GRPADR050 and INNELEC MULTIMMINHEO153 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNELEC MULTIMMINHEO153 and UNIVMUSIC GRPADR/050 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 UNIVMUSIC GRPADR050 are associated (or correlated) with INNELEC MULTIMMINHEO153. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNELEC MULTIMMINHEO153 has no effect on the direction of UNIVMUSIC GRPADR/050 i.e., UNIVMUSIC GRPADR/050 and INNELEC MULTIMMINHEO153 go up and down completely randomly.

Pair Corralation between UNIVMUSIC GRPADR/050 and INNELEC MULTIMMINHEO153

Assuming the 90 days trading horizon UNIVMUSIC GRPADR/050 is expected to generate 1.86 times less return on investment than INNELEC MULTIMMINHEO153. But when comparing it to its historical volatility, UNIVMUSIC GRPADR050 is 1.62 times less risky than INNELEC MULTIMMINHEO153. It trades about 0.13 of its potential returns per unit of risk. INNELEC MULTIMMINHEO153 is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  268.00  in INNELEC MULTIMMINHEO153 on April 20, 2025 and sell it today you would earn a total of  66.00  from holding INNELEC MULTIMMINHEO153 or generate 24.63% return on investment over 90 days.

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

UNIVMUSIC GRPADR050  vs.  INNELEC MULTIMMINHEO153

UNIVMUSIC GRPADR/050

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UNIVMUSIC GRPADR050 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, UNIVMUSIC GRPADR/050 reported solid returns over the last few months and may actually be approaching a breakup point.

INNELEC MULTIMMINHEO153

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INNELEC MULTIMMINHEO153 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, INNELEC MULTIMMINHEO153 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UNIVMUSIC GRPADR/050 and INNELEC MULTIMMINHEO153

The main advantage of trading using opposite UNIVMUSIC GRPADR/050 and INNELEC MULTIMMINHEO153 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVMUSIC GRPADR/050 position performs unexpectedly, INNELEC MULTIMMINHEO153 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 INNELEC MULTIMMINHEO153 will offset losses from the drop in INNELEC MULTIMMINHEO153's long position.

The idea behind UNIVMUSIC GRPADR050 and INNELEC MULTIMMINHEO153 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.