Correlation Between Uniper SE and Overstock
Can any of the company-specific risk be diversified away by investing in both Uniper SE and Overstock 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 Overstock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and Overstock, you can compare the effects of market volatilities on Uniper SE and Overstock 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 Overstock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Overstock.
Diversification Opportunities for Uniper SE and Overstock
Poor diversification
The 3 months correlation between Uniper and Overstock is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Overstock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overstock 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 Overstock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overstock has no effect on the direction of Uniper SE i.e., Uniper SE and Overstock go up and down completely randomly.
Pair Corralation between Uniper SE and Overstock
Assuming the 90 days trading horizon Uniper SE is expected to generate 0.48 times more return on investment than Overstock. However, Uniper SE is 2.11 times less risky than Overstock. It trades about -0.09 of its potential returns per unit of risk. Overstock is currently generating about -0.2 per unit of risk. If you would invest 4,128 in Uniper SE on September 24, 2024 and sell it today you would lose (173.00) from holding Uniper SE or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uniper SE vs. Overstock
Performance |
| Timeline |
| Uniper SE |
| Overstock |
Uniper SE and Overstock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniper SE and Overstock
The main advantage of trading using opposite Uniper SE and Overstock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, Overstock 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 Overstock will offset losses from the drop in Overstock's long position.| Uniper SE vs. Mulberry Group PLC | Uniper SE vs. London Security Plc | Uniper SE vs. Triad Group PLC | Uniper SE vs. SURETRACK MON |
| Overstock vs. Uniper SE | Overstock vs. Mulberry Group PLC | Overstock vs. London Security Plc | Overstock 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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