Correlation Between Gujarat Alkalies and UFLEX

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

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

Diversification Opportunities for Gujarat Alkalies and UFLEX

-0.45

Correlation Coefficient

Gujarat Alkalies  UFLEX

Very good diversification

The 3 months correlation between Gujarat and UFLEX is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Gujarat Alkalies and and UFLEX Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UFLEX Limited and Gujarat Alkalies 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 Gujarat Alkalies and are associated (or correlated) with UFLEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UFLEX Limited has no effect on the direction of Gujarat Alkalies i.e., Gujarat Alkalies and UFLEX go up and down completely randomly.

Pair Corralation between Gujarat Alkalies and UFLEX

Assuming the 90 days trading horizon Gujarat Alkalies and is expected to under-perform the UFLEX. In addition to that, Gujarat Alkalies is 1.19 times more volatile than UFLEX Limited. It trades about -0.03 of its total potential returns per unit of risk. UFLEX Limited is currently generating about 0.09 per unit of volatility. If you would invest  55,325  in UFLEX Limited on April 25, 2025 and sell it today you would earn a total of  4,550  from holding UFLEX Limited or generate 8.22% return on investment over 90 days.

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

Gujarat Alkalies and  vs.  UFLEX Limited

Gujarat Alkalies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gujarat Alkalies and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Gujarat Alkalies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

UFLEX Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UFLEX Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, UFLEX may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Gujarat Alkalies and UFLEX

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

The idea behind Gujarat Alkalies and and UFLEX Limited 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.