Correlation Between Uniper SE and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Uniper SE and Automatic Data 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 Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and Automatic Data Processing, you can compare the effects of market volatilities on Uniper SE and Automatic Data 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 Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Automatic Data.
Diversification Opportunities for Uniper SE and Automatic Data
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Uniper and Automatic is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing 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 Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Uniper SE i.e., Uniper SE and Automatic Data go up and down completely randomly.
Pair Corralation between Uniper SE and Automatic Data
Assuming the 90 days trading horizon Uniper SE is expected to generate 2.84 times more return on investment than Automatic Data. However, Uniper SE is 2.84 times more volatile than Automatic Data Processing. It trades about 0.3 of its potential returns per unit of risk. Automatic Data Processing is currently generating about 0.1 per unit of risk. If you would invest 3,939 in Uniper SE on October 23, 2024 and sell it today you would earn a total of 508.00 from holding Uniper SE or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Uniper SE vs. Automatic Data Processing
Performance |
| Timeline |
| Uniper SE |
| Automatic Data Processing |
Uniper SE and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniper SE and Automatic Data
The main advantage of trading using opposite Uniper SE and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| Uniper SE vs. Gruppo MutuiOnline SpA | Uniper SE vs. Smithson Investment Trust | Uniper SE vs. Broadridge Financial Solutions | Uniper SE vs. EJF Investments |
| Automatic Data vs. Home Depot | Automatic Data vs. Weiss Korea Opportunity | Automatic Data vs. River and Mercantile | Automatic Data vs. Chrysalis Investments |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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