Correlation Between Tomra Systems and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Tomra Systems and Uniper SE 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 Tomra Systems and Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tomra Systems ASA and Uniper SE, you can compare the effects of market volatilities on Tomra Systems and Uniper SE 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 Tomra Systems with a short position of Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tomra Systems and Uniper SE.
Diversification Opportunities for Tomra Systems and Uniper SE
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tomra and Uniper is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Tomra Systems ASA and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and Tomra Systems 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 Tomra Systems ASA are associated (or correlated) with Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Tomra Systems i.e., Tomra Systems and Uniper SE go up and down completely randomly.
Pair Corralation between Tomra Systems and Uniper SE
Assuming the 90 days trading horizon Tomra Systems is expected to generate 1.85 times less return on investment than Uniper SE. But when comparing it to its historical volatility, Tomra Systems ASA is 1.09 times less risky than Uniper SE. It trades about 0.03 of its potential returns per unit of risk. Uniper SE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,928 in Uniper SE on November 3, 2024 and sell it today you would earn a total of 489.00 from holding Uniper SE or generate 12.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Tomra Systems ASA vs. Uniper SE
Performance |
| Timeline |
| Tomra Systems ASA |
| Uniper SE |
Tomra Systems and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tomra Systems and Uniper SE
The main advantage of trading using opposite Tomra Systems and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tomra Systems position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.| Tomra Systems vs. Samsung Electronics Co | Tomra Systems vs. Samsung Electronics Co | Tomra Systems vs. Toyota Motor Corp | Tomra Systems vs. SoftBank Group Corp |
| Uniper SE vs. Zoom Video Communications | Uniper SE vs. Scandic Hotels Group | Uniper SE vs. Charter Communications Cl | Uniper SE vs. Dalata Hotel 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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