Correlation Between UNITED URBAN and Accor SA
Can any of the company-specific risk be diversified away by investing in both UNITED URBAN and Accor SA 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 UNITED URBAN and Accor SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED URBAN INV and Accor SA, you can compare the effects of market volatilities on UNITED URBAN and Accor SA 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 UNITED URBAN with a short position of Accor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED URBAN and Accor SA.
Diversification Opportunities for UNITED URBAN and Accor SA
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UNITED and Accor is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding UNITED URBAN INV and Accor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor SA and UNITED URBAN 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 UNITED URBAN INV are associated (or correlated) with Accor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor SA has no effect on the direction of UNITED URBAN i.e., UNITED URBAN and Accor SA go up and down completely randomly.
Pair Corralation between UNITED URBAN and Accor SA
Assuming the 90 days horizon UNITED URBAN INV is expected to generate 0.45 times more return on investment than Accor SA. However, UNITED URBAN INV is 2.23 times less risky than Accor SA. It trades about 0.3 of its potential returns per unit of risk. Accor SA is currently generating about 0.05 per unit of risk. If you would invest 81,000 in UNITED URBAN INV on August 25, 2024 and sell it today you would earn a total of 3,500 from holding UNITED URBAN INV or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED URBAN INV vs. Accor SA
Performance |
| Timeline |
| UNITED URBAN INV |
| Accor SA |
UNITED URBAN and Accor SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED URBAN and Accor SA
The main advantage of trading using opposite UNITED URBAN and Accor SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED URBAN position performs unexpectedly, Accor SA 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 Accor SA will offset losses from the drop in Accor SA's long position.| UNITED URBAN vs. Upland Software | UNITED URBAN vs. Unity Software | UNITED URBAN vs. Sterling Construction | UNITED URBAN vs. Alfa Financial Software |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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