Correlation Between United Internet and Auction Technology
Can any of the company-specific risk be diversified away by investing in both United Internet and Auction Technology 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 Auction Technology 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 Auction Technology Group, you can compare the effects of market volatilities on United Internet and Auction Technology 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 Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and Auction Technology.
Diversification Opportunities for United Internet and Auction Technology
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Auction is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology 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 Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of United Internet i.e., United Internet and Auction Technology go up and down completely randomly.
Pair Corralation between United Internet and Auction Technology
Assuming the 90 days trading horizon United Internet AG is expected to under-perform the Auction Technology. But the stock apears to be less risky and, when comparing its historical volatility, United Internet AG is 1.47 times less risky than Auction Technology. The stock trades about -0.02 of its potential returns per unit of risk. The Auction Technology Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 60,100 in Auction Technology Group on September 15, 2024 and sell it today you would lose (2,600) from holding Auction Technology Group or give up 4.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Internet AG vs. Auction Technology Group
Performance |
| Timeline |
| United Internet AG |
| Auction Technology |
United Internet and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Internet and Auction Technology
The main advantage of trading using opposite United Internet and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, Auction Technology 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| United Internet vs. Samsung Electronics Co | United Internet vs. Samsung Electronics Co | United Internet vs. Hyundai Motor | United Internet vs. Reliance Industries Ltd |
| Auction Technology vs. Datagroup SE | Auction Technology vs. United Internet AG | Auction Technology vs. CAP LEASE AVIATION | Auction Technology vs. Universal Display Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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