Correlation Between Uniper SE and Yum Brands
Can any of the company-specific risk be diversified away by investing in both Uniper SE and Yum Brands 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 Yum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and Yum Brands, you can compare the effects of market volatilities on Uniper SE and Yum Brands 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 Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Yum Brands.
Diversification Opportunities for Uniper SE and Yum Brands
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Uniper and Yum is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands 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 Yum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yum Brands has no effect on the direction of Uniper SE i.e., Uniper SE and Yum Brands go up and down completely randomly.
Pair Corralation between Uniper SE and Yum Brands
Assuming the 90 days trading horizon Uniper SE is expected to under-perform the Yum Brands. But the stock apears to be less risky and, when comparing its historical volatility, Uniper SE is 1.04 times less risky than Yum Brands. The stock trades about 0.0 of its potential returns per unit of risk. The Yum Brands is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 12,237 in Yum Brands on September 23, 2024 and sell it today you would earn a total of 918.00 from holding Yum Brands or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.81% |
| Values | Daily Returns |
Uniper SE vs. Yum Brands
Performance |
| Timeline |
| Uniper SE |
| Yum Brands |
Uniper SE and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniper SE and Yum Brands
The main advantage of trading using opposite Uniper SE and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, Yum Brands 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 Yum Brands will offset losses from the drop in Yum Brands' 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 |
| Yum Brands vs. Uniper SE | Yum Brands vs. Mulberry Group PLC | Yum Brands vs. London Security Plc | Yum Brands 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |