Correlation Between US Physical and UTD OV

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

By analyzing existing cross correlation between US Physical Therapy and UTD OV BK LOC ADR1, you can compare the effects of market volatilities on US Physical and UTD OV 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 US Physical with a short position of UTD OV. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Physical and UTD OV.

Diversification Opportunities for US Physical and UTD OV

0.5

Correlation Coefficient

US Physical  UTD OV

Very weak diversification

The 3 months correlation between UPH and UTD is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding US Physical Therapy and UTD OV BK LOC ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UTD OV BK and US Physical 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 US Physical Therapy are associated (or correlated) with UTD OV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UTD OV BK has no effect on the direction of US Physical i.e., US Physical and UTD OV go up and down completely randomly.

Pair Corralation between US Physical and UTD OV

Assuming the 90 days horizon US Physical Therapy is expected to generate 1.61 times more return on investment than UTD OV. However, US Physical is 1.61 times more volatile than UTD OV BK LOC ADR1. It trades about 0.07 of its potential returns per unit of risk. UTD OV BK LOC ADR1 is currently generating about 0.09 per unit of risk. If you would invest  5,965  in US Physical Therapy on April 24, 2025 and sell it today you would earn a total of  435.00  from holding US Physical Therapy or generate 7.29% return on investment over 90 days.

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

US Physical Therapy  vs.  UTD OV BK LOC ADR1

US Physical Therapy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in US Physical Therapy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, US Physical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

UTD OV BK

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UTD OV BK LOC ADR1 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, UTD OV may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with US Physical and UTD OV

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

The idea behind US Physical Therapy and UTD OV BK LOC ADR1 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.