Correlation Between Uniper SE and Indutrade
Can any of the company-specific risk be diversified away by investing in both Uniper SE and Indutrade 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 Uniper SE and Indutrade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and Indutrade AB, you can compare the effects of market volatilities on Uniper SE and Indutrade 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 Uniper SE with a short position of Indutrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Indutrade.
Diversification Opportunities for Uniper SE and Indutrade
Very weak diversification
The 3 months correlation between Uniper and Indutrade is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB and Uniper SE 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 Uniper SE are associated (or correlated) with Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Uniper SE i.e., Uniper SE and Indutrade go up and down completely randomly.
Pair Corralation between Uniper SE and Indutrade
Assuming the 90 days trading horizon Uniper SE is expected to under-perform the Indutrade. In addition to that, Uniper SE is 1.4 times more volatile than Indutrade AB. It trades about -0.04 of its total potential returns per unit of risk. Indutrade AB is currently generating about 0.02 per unit of volatility. If you would invest 26,672 in Indutrade AB on September 1, 2024 and sell it today you would earn a total of 978.00 from holding Indutrade AB or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Uniper SE vs. Indutrade AB
Performance |
| Timeline |
| Uniper SE |
| Indutrade AB |
Uniper SE and Indutrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniper SE and Indutrade
The main advantage of trading using opposite Uniper SE and Indutrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, Indutrade 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 Indutrade will offset losses from the drop in Indutrade's long position.| Uniper SE vs. Zoom Video Communications | Uniper SE vs. Iron Mountain | Uniper SE vs. BE Semiconductor Industries | Uniper SE vs. Cairo Communication SpA |
| Indutrade vs. Uniper SE | Indutrade vs. Mulberry Group PLC | Indutrade vs. London Security Plc | Indutrade vs. Triad Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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