Correlation Between United Internet and Chrysalis Investments
Can any of the company-specific risk be diversified away by investing in both United Internet and Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments, you can compare the effects of market volatilities on United Internet and Chrysalis Investments 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 Chrysalis Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and Chrysalis Investments.
Diversification Opportunities for United Internet and Chrysalis Investments
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Chrysalis is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and Chrysalis Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chrysalis Investments 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 Chrysalis Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chrysalis Investments has no effect on the direction of United Internet i.e., United Internet and Chrysalis Investments go up and down completely randomly.
Pair Corralation between United Internet and Chrysalis Investments
Assuming the 90 days trading horizon United Internet AG is expected to generate 0.93 times more return on investment than Chrysalis Investments. However, United Internet AG is 1.08 times less risky than Chrysalis Investments. It trades about -0.06 of its potential returns per unit of risk. Chrysalis Investments is currently generating about -0.06 per unit of risk. If you would invest 1,565 in United Internet AG on October 30, 2024 and sell it today you would lose (48.00) from holding United Internet AG or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Internet AG vs. Chrysalis Investments
Performance |
| Timeline |
| United Internet AG |
| Chrysalis Investments |
United Internet and Chrysalis Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Internet and Chrysalis Investments
The main advantage of trading using opposite United Internet and Chrysalis Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, Chrysalis Investments 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 Chrysalis Investments will offset losses from the drop in Chrysalis Investments' long position.| United Internet vs. Smithson Investment Trust | United Internet vs. Tavistock Investments Plc | United Internet vs. Elmos Semiconductor SE | United Internet vs. Compagnie Plastic Omnium |
| Chrysalis Investments vs. Liberty Media Corp | Chrysalis Investments vs. Zinc Media Group | Chrysalis Investments vs. Ebro Foods | Chrysalis Investments vs. Sligro Food Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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