Correlation Between UTI Asset and Steelcast

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

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

Diversification Opportunities for UTI Asset and Steelcast

0.93

Correlation Coefficient

UTI Asset  Steelcast

Almost no diversification

The 3 months correlation between UTI and Steelcast is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding UTI Asset Management and Steelcast Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steelcast Limited and UTI Asset 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 UTI Asset Management are associated (or correlated) with Steelcast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steelcast Limited has no effect on the direction of UTI Asset i.e., UTI Asset and Steelcast go up and down completely randomly.

Pair Corralation between UTI Asset and Steelcast

Assuming the 90 days trading horizon UTI Asset is expected to generate 1.01 times less return on investment than Steelcast. But when comparing it to its historical volatility, UTI Asset Management is 1.16 times less risky than Steelcast. It trades about 0.22 of its potential returns per unit of risk. Steelcast Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  88,390  in Steelcast Limited on April 20, 2025 and sell it today you would earn a total of  29,720  from holding Steelcast Limited or generate 33.62% return on investment over 90 days.

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

UTI Asset Management  vs.  Steelcast Limited

UTI Asset Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UTI Asset Management are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, UTI Asset sustained solid returns over the last few months and may actually be approaching a breakup point.

Steelcast Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Steelcast Limited are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Steelcast sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UTI Asset and Steelcast

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

The idea behind UTI Asset Management and Steelcast 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.