Correlation Between Stanley Black and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Stanley Black 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 Stanley Black and Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stanley Black Decker and Uniper SE, you can compare the effects of market volatilities on Stanley Black 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 Stanley Black with a short position of Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stanley Black and Uniper SE.
Diversification Opportunities for Stanley Black and Uniper SE
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stanley and Uniper is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Stanley Black Decker and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and Stanley Black 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 Stanley Black Decker 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 Stanley Black i.e., Stanley Black and Uniper SE go up and down completely randomly.
Pair Corralation between Stanley Black and Uniper SE
Assuming the 90 days trading horizon Stanley Black Decker is expected to under-perform the Uniper SE. But the stock apears to be less risky and, when comparing its historical volatility, Stanley Black Decker is 1.03 times less risky than Uniper SE. The stock trades about -0.07 of its potential returns per unit of risk. The Uniper SE is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 4,461 in Uniper SE on September 2, 2024 and sell it today you would lose (142.00) from holding Uniper SE or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Stanley Black Decker vs. Uniper SE
Performance |
| Timeline |
| Stanley Black Decker |
| Uniper SE |
Stanley Black and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stanley Black and Uniper SE
The main advantage of trading using opposite Stanley Black and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stanley Black 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.| Stanley Black vs. Baker Steel Resources | Stanley Black vs. Endeavour Mining Corp | Stanley Black vs. Eastinco Mining Exploration | Stanley Black vs. Hochschild Mining plc |
| Uniper SE vs. Roebuck Food Group | Uniper SE vs. Sealed Air Corp | Uniper SE vs. Hilton Food Group | Uniper SE vs. Ryanair Holdings plc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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