Correlation Between Cembra Money and United Internet
Can any of the company-specific risk be diversified away by investing in both Cembra Money and United Internet 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 Cembra Money and United Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cembra Money Bank and United Internet AG, you can compare the effects of market volatilities on Cembra Money and United Internet 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 Cembra Money with a short position of United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cembra Money and United Internet.
Diversification Opportunities for Cembra Money and United Internet
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cembra and United is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG and Cembra Money 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 Cembra Money Bank are associated (or correlated) with United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of Cembra Money i.e., Cembra Money and United Internet go up and down completely randomly.
Pair Corralation between Cembra Money and United Internet
Assuming the 90 days trading horizon Cembra Money Bank is expected to generate 0.56 times more return on investment than United Internet. However, Cembra Money Bank is 1.78 times less risky than United Internet. It trades about 0.57 of its potential returns per unit of risk. United Internet AG is currently generating about -0.03 per unit of risk. If you would invest 8,154 in Cembra Money Bank on October 26, 2024 and sell it today you would earn a total of 706.00 from holding Cembra Money Bank or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cembra Money Bank vs. United Internet AG
Performance |
| Timeline |
| Cembra Money Bank |
| United Internet AG |
Cembra Money and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cembra Money and United Internet
The main advantage of trading using opposite Cembra Money and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.| Cembra Money vs. United Internet AG | Cembra Money vs. Synchrony Financial | Cembra Money vs. SoftBank Group Corp | Cembra Money vs. Universal Display Corp |
| United Internet vs. Molson Coors Beverage | United Internet vs. Pentair PLC | United Internet vs. Pets at Home | United Internet vs. Young Cos Brewery |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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