Correlation Between United Internet and Adriatic Metals
Can any of the company-specific risk be diversified away by investing in both United Internet and Adriatic Metals 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 United Internet and Adriatic Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Internet AG and Adriatic Metals, you can compare the effects of market volatilities on United Internet and Adriatic Metals 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 United Internet with a short position of Adriatic Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and Adriatic Metals.
Diversification Opportunities for United Internet and Adriatic Metals
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Adriatic is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and Adriatic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adriatic Metals and United Internet 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 United Internet AG are associated (or correlated) with Adriatic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adriatic Metals has no effect on the direction of United Internet i.e., United Internet and Adriatic Metals go up and down completely randomly.
Pair Corralation between United Internet and Adriatic Metals
Assuming the 90 days trading horizon United Internet AG is expected to generate 1.11 times more return on investment than Adriatic Metals. However, United Internet is 1.11 times more volatile than Adriatic Metals. It trades about 0.19 of its potential returns per unit of risk. Adriatic Metals is currently generating about 0.05 per unit of risk. If you would invest 1,563 in United Internet AG on November 29, 2024 and sell it today you would earn a total of 171.00 from holding United Internet AG or generate 10.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Internet AG vs. Adriatic Metals
Performance |
| Timeline |
| United Internet AG |
| Adriatic Metals |
United Internet and Adriatic Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Internet and Adriatic Metals
The main advantage of trading using opposite United Internet and Adriatic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, Adriatic Metals 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 Adriatic Metals will offset losses from the drop in Adriatic Metals' long position.| United Internet vs. InterContinental Hotels Group | United Internet vs. MoneysupermarketCom Group PLC | United Internet vs. Wyndham Hotels Resorts | United Internet vs. Extra Space Storage |
| Adriatic Metals vs. Deutsche Pfandbriefbank AG | Adriatic Metals vs. FinecoBank SpA | Adriatic Metals vs. Liechtensteinische Landesbank AG | Adriatic Metals vs. Erste Group Bank |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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