Correlation Between Liechtensteinische and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Liechtensteinische and Uniper SE 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 Liechtensteinische and Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liechtensteinische Landesbank AG and Uniper SE, you can compare the effects of market volatilities on Liechtensteinische and Uniper SE 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 Liechtensteinische with a short position of Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liechtensteinische and Uniper SE.
Diversification Opportunities for Liechtensteinische and Uniper SE
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liechtensteinische and Uniper is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Liechtensteinische Landesbank and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and Liechtensteinische 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 Liechtensteinische Landesbank AG are associated (or correlated) with Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Liechtensteinische i.e., Liechtensteinische and Uniper SE go up and down completely randomly.
Pair Corralation between Liechtensteinische and Uniper SE
Assuming the 90 days trading horizon Liechtensteinische is expected to generate 1.29 times less return on investment than Uniper SE. But when comparing it to its historical volatility, Liechtensteinische Landesbank AG is 3.56 times less risky than Uniper SE. It trades about 0.28 of its potential returns per unit of risk. Uniper SE is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,181 in Uniper SE on October 9, 2024 and sell it today you would earn a total of 142.00 from holding Uniper SE or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liechtensteinische Landesbank vs. Uniper SE
Performance |
| Timeline |
| Liechtensteinische |
| Uniper SE |
Liechtensteinische and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liechtensteinische and Uniper SE
The main advantage of trading using opposite Liechtensteinische and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liechtensteinische position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.| Liechtensteinische vs. Walmart | Liechtensteinische vs. BYD Co | Liechtensteinische vs. Volkswagen AG | Liechtensteinische vs. Volkswagen AG Non Vtg |
| Uniper SE vs. Broadcom | Uniper SE vs. Costco Wholesale Corp | Uniper SE vs. Ross Stores | Uniper SE vs. Hochschild Mining 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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