Correlation Between Uniper SE and Associated British
Can any of the company-specific risk be diversified away by investing in both Uniper SE and Associated British 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 Associated British into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and Associated British Foods, you can compare the effects of market volatilities on Uniper SE and Associated British 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 Associated British. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Associated British.
Diversification Opportunities for Uniper SE and Associated British
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uniper and Associated is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Associated British Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Associated British Foods 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 Associated British. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Associated British Foods has no effect on the direction of Uniper SE i.e., Uniper SE and Associated British go up and down completely randomly.
Pair Corralation between Uniper SE and Associated British
Assuming the 90 days trading horizon Uniper SE is expected to generate 11.6 times less return on investment than Associated British. In addition to that, Uniper SE is 2.98 times more volatile than Associated British Foods. It trades about 0.0 of its total potential returns per unit of risk. Associated British Foods is currently generating about 0.04 per unit of volatility. If you would invest 169,283 in Associated British Foods on September 28, 2024 and sell it today you would earn a total of 35,117 from holding Associated British Foods or generate 20.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uniper SE vs. Associated British Foods
Performance |
| Timeline |
| Uniper SE |
| Associated British Foods |
Uniper SE and Associated British Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniper SE and Associated British
The main advantage of trading using opposite Uniper SE and Associated British positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, Associated British 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 Associated British will offset losses from the drop in Associated British'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 |
| Associated British vs. Uniper SE | Associated British vs. Mulberry Group PLC | Associated British vs. London Security Plc | Associated British 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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