Correlation Between UNI and SPACE

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

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

Diversification Opportunities for UNI and SPACE

-0.31

Correlation Coefficient

UNI  SPACE

Very good diversification

The 3 months correlation between UNI and SPACE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding UNI and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE and UNI 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 UNI are associated (or correlated) with SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of UNI i.e., UNI and SPACE go up and down completely randomly.

Pair Corralation between UNI and SPACE

Assuming the 90 days trading horizon UNI is expected to generate 1.44 times more return on investment than SPACE. However, UNI is 1.44 times more volatile than SPACE. It trades about 0.14 of its potential returns per unit of risk. SPACE is currently generating about 0.0 per unit of risk. If you would invest  582.00  in UNI on April 25, 2025 and sell it today you would earn a total of  437.00  from holding UNI or generate 75.09% return on investment over 90 days.

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

UNI  vs.  SPACE

UNI

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNI are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward indicators, UNI exhibited solid returns over the last few months and may actually be approaching a breakup point.

SPACE

Risk-Adjusted Performance

Weak

Over the last 90 days SPACE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, SPACE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with UNI and SPACE

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

The idea behind UNI and SPACE 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.