Correlation Between Uniper SE and Universal Health
Can any of the company-specific risk be diversified away by investing in both Uniper SE and Universal Health 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 Universal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and Universal Health Services, you can compare the effects of market volatilities on Uniper SE and Universal Health 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 Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Universal Health.
Diversification Opportunities for Uniper SE and Universal Health
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Uniper and Universal is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services 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 Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of Uniper SE i.e., Uniper SE and Universal Health go up and down completely randomly.
Pair Corralation between Uniper SE and Universal Health
Assuming the 90 days trading horizon Uniper SE is expected to generate 1.38 times more return on investment than Universal Health. However, Uniper SE is 1.38 times more volatile than Universal Health Services. It trades about 0.02 of its potential returns per unit of risk. Universal Health Services is currently generating about -0.1 per unit of risk. If you would invest 4,251 in Uniper SE on September 2, 2024 and sell it today you would earn a total of 68.00 from holding Uniper SE or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.97% |
| Values | Daily Returns |
Uniper SE vs. Universal Health Services
Performance |
| Timeline |
| Uniper SE |
| Universal Health Services |
Uniper SE and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniper SE and Universal Health
The main advantage of trading using opposite Uniper SE and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, Universal Health 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 Universal Health will offset losses from the drop in Universal Health's long position.| Uniper SE vs. Roebuck Food Group | Uniper SE vs. Sealed Air Corp | Uniper SE vs. Hilton Food Group | Uniper SE vs. Ryanair Holdings plc |
| Universal Health vs. Uniper SE | Universal Health vs. Mulberry Group PLC | Universal Health vs. London Security Plc | Universal Health 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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