Correlation Between United Internet and Smarttech247 Group
Can any of the company-specific risk be diversified away by investing in both United Internet and Smarttech247 Group 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 Smarttech247 Group 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 Smarttech247 Group PLC, you can compare the effects of market volatilities on United Internet and Smarttech247 Group 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 Smarttech247 Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and Smarttech247 Group.
Diversification Opportunities for United Internet and Smarttech247 Group
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Smarttech247 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and Smarttech247 Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smarttech247 Group PLC 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 Smarttech247 Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smarttech247 Group PLC has no effect on the direction of United Internet i.e., United Internet and Smarttech247 Group go up and down completely randomly.
Pair Corralation between United Internet and Smarttech247 Group
Assuming the 90 days trading horizon United Internet AG is expected to generate 0.24 times more return on investment than Smarttech247 Group. However, United Internet AG is 4.14 times less risky than Smarttech247 Group. It trades about -0.07 of its potential returns per unit of risk. Smarttech247 Group PLC is currently generating about -0.06 per unit of risk. If you would invest 1,574 in United Internet AG on October 26, 2024 and sell it today you would lose (64.00) from holding United Internet AG or give up 4.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Internet AG vs. Smarttech247 Group PLC
Performance |
| Timeline |
| United Internet AG |
| Smarttech247 Group PLC |
United Internet and Smarttech247 Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Internet and Smarttech247 Group
The main advantage of trading using opposite United Internet and Smarttech247 Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, Smarttech247 Group 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 Smarttech247 Group will offset losses from the drop in Smarttech247 Group's long position.| United Internet vs. Molson Coors Beverage | United Internet vs. Pentair PLC | United Internet vs. Pets at Home | United Internet vs. Young Cos Brewery |
| Smarttech247 Group vs. Sabien Technology Group | Smarttech247 Group vs. United Internet AG | Smarttech247 Group vs. Sunny Optical Technology | Smarttech247 Group vs. DXC Technology Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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