Correlation Between COFCO Joycome and Unipol Gruppo
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and Unipol Gruppo 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 COFCO Joycome and Unipol Gruppo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and Unipol Gruppo Finanziario, you can compare the effects of market volatilities on COFCO Joycome and Unipol Gruppo 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 COFCO Joycome with a short position of Unipol Gruppo. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and Unipol Gruppo.
Diversification Opportunities for COFCO Joycome and Unipol Gruppo
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COFCO and Unipol is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and Unipol Gruppo Finanziario in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unipol Gruppo Finanziario and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with Unipol Gruppo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unipol Gruppo Finanziario has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and Unipol Gruppo go up and down completely randomly.
Pair Corralation between COFCO Joycome and Unipol Gruppo
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the Unipol Gruppo. But the stock apears to be less risky and, when comparing its historical volatility, COFCO Joycome Foods is 1.11 times less risky than Unipol Gruppo. The stock trades about -0.24 of its potential returns per unit of risk. The Unipol Gruppo Finanziario is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,176 in Unipol Gruppo Finanziario on October 25, 2024 and sell it today you would earn a total of 96.00 from holding Unipol Gruppo Finanziario or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. Unipol Gruppo Finanziario
Performance |
| Timeline |
| COFCO Joycome Foods |
| Unipol Gruppo Finanziario |
COFCO Joycome and Unipol Gruppo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and Unipol Gruppo
The main advantage of trading using opposite COFCO Joycome and Unipol Gruppo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, Unipol Gruppo 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 Unipol Gruppo will offset losses from the drop in Unipol Gruppo's long position.| COFCO Joycome vs. General Mills | COFCO Joycome vs. Danone SA | COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Kellogg Company |
| Unipol Gruppo vs. COFCO Joycome Foods | Unipol Gruppo vs. Nomad Foods | Unipol Gruppo vs. GAZTRTECHNIUADR15EO01 | Unipol Gruppo vs. PURE FOODS TASMANIA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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