Correlation Between Uniper SE and Imperial Brands
Can any of the company-specific risk be diversified away by investing in both Uniper SE and Imperial 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 Imperial 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 Imperial Brands PLC, you can compare the effects of market volatilities on Uniper SE and Imperial 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 Imperial Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Imperial Brands.
Diversification Opportunities for Uniper SE and Imperial Brands
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Uniper and Imperial is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Imperial Brands PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Brands PLC 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 Imperial Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Brands PLC has no effect on the direction of Uniper SE i.e., Uniper SE and Imperial Brands go up and down completely randomly.
Pair Corralation between Uniper SE and Imperial Brands
Assuming the 90 days trading horizon Uniper SE is expected to generate 1.61 times less return on investment than Imperial Brands. In addition to that, Uniper SE is 1.51 times more volatile than Imperial Brands PLC. It trades about 0.11 of its total potential returns per unit of risk. Imperial Brands PLC is currently generating about 0.27 per unit of volatility. If you would invest 261,295 in Imperial Brands PLC on November 28, 2024 and sell it today you would earn a total of 17,405 from holding Imperial Brands PLC or generate 6.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uniper SE vs. Imperial Brands PLC
Performance |
| Timeline |
| Uniper SE |
| Imperial Brands PLC |
Uniper SE and Imperial Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniper SE and Imperial Brands
The main advantage of trading using opposite Uniper SE and Imperial Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, Imperial 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 Imperial Brands will offset losses from the drop in Imperial Brands' long position.| Uniper SE vs. Take Two Interactive Software | Uniper SE vs. Molson Coors Beverage | Uniper SE vs. Fevertree Drinks Plc | Uniper SE vs. Monster Beverage Corp |
| Imperial Brands vs. Hochschild Mining plc | Imperial Brands vs. Fevertree Drinks Plc | Imperial Brands vs. bet at home AG | Imperial Brands vs. Cairn Homes 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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