Correlation Between United Internet and Marwyn Value
Can any of the company-specific risk be diversified away by investing in both United Internet and Marwyn Value 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 Marwyn Value 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 Marwyn Value Investors, you can compare the effects of market volatilities on United Internet and Marwyn Value 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 Marwyn Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and Marwyn Value.
Diversification Opportunities for United Internet and Marwyn Value
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between United and Marwyn is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and Marwyn Value Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marwyn Value Investors 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 Marwyn Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marwyn Value Investors has no effect on the direction of United Internet i.e., United Internet and Marwyn Value go up and down completely randomly.
Pair Corralation between United Internet and Marwyn Value
Assuming the 90 days trading horizon United Internet is expected to generate 4.8 times less return on investment than Marwyn Value. In addition to that, United Internet is 1.03 times more volatile than Marwyn Value Investors. It trades about 0.1 of its total potential returns per unit of risk. Marwyn Value Investors is currently generating about 0.49 per unit of volatility. If you would invest 8,900 in Marwyn Value Investors on October 24, 2024 and sell it today you would earn a total of 1,100 from holding Marwyn Value Investors or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Internet AG vs. Marwyn Value Investors
Performance |
| Timeline |
| United Internet AG |
| Marwyn Value Investors |
United Internet and Marwyn Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Internet and Marwyn Value
The main advantage of trading using opposite United Internet and Marwyn Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, Marwyn Value 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 Marwyn Value will offset losses from the drop in Marwyn Value's long position.| United Internet vs. Allianz Technology Trust | United Internet vs. Cognizant Technology Solutions | United Internet vs. Accesso Technology Group | United Internet vs. Take Two Interactive Software |
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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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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