Correlation Between UQC and AKRO

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

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

Diversification Opportunities for UQC and AKRO

-0.13

Correlation Coefficient

UQC  AKRO

Good diversification

The 3 months correlation between UQC and AKRO is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding UQC and AKRO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKRO and UQC 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 UQC are associated (or correlated) with AKRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKRO has no effect on the direction of UQC i.e., UQC and AKRO go up and down completely randomly.

Pair Corralation between UQC and AKRO

Assuming the 90 days trading horizon UQC is expected to generate 8.73 times less return on investment than AKRO. But when comparing it to its historical volatility, UQC is 1.4 times less risky than AKRO. It trades about 0.02 of its potential returns per unit of risk. AKRO is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  0.12  in AKRO on July 10, 2025 and sell it today you would earn a total of  0.06  from holding AKRO or generate 53.91% return on investment over 90 days.

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

UQC  vs.  AKRO

UQC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UQC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, UQC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

AKRO

Risk-Adjusted Performance

Good

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

Pair Trading with UQC and AKRO

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

The idea behind UQC and AKRO 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.