Correlation Between Aedas Homes and Unipol Gruppo
Can any of the company-specific risk be diversified away by investing in both Aedas Homes and Unipol Gruppo 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 Aedas Homes and Unipol Gruppo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SA and Unipol Gruppo Finanziario, you can compare the effects of market volatilities on Aedas Homes and Unipol Gruppo 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 Aedas Homes with a short position of Unipol Gruppo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and Unipol Gruppo.
Diversification Opportunities for Aedas Homes and Unipol Gruppo
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aedas and Unipol is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA and Unipol Gruppo Finanziario in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unipol Gruppo Finanziario and Aedas Homes 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 Aedas Homes SA are associated (or correlated) with Unipol Gruppo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unipol Gruppo Finanziario has no effect on the direction of Aedas Homes i.e., Aedas Homes and Unipol Gruppo go up and down completely randomly.
Pair Corralation between Aedas Homes and Unipol Gruppo
Assuming the 90 days horizon Aedas Homes SA is expected to generate 1.47 times more return on investment than Unipol Gruppo. However, Aedas Homes is 1.47 times more volatile than Unipol Gruppo Finanziario. It trades about 0.27 of its potential returns per unit of risk. Unipol Gruppo Finanziario is currently generating about 0.35 per unit of risk. If you would invest 2,580 in Aedas Homes SA on November 4, 2024 and sell it today you would earn a total of 320.00 from holding Aedas Homes SA or generate 12.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aedas Homes SA vs. Unipol Gruppo Finanziario
Performance |
| Timeline |
| Aedas Homes SA |
| Unipol Gruppo Finanziario |
Aedas Homes and Unipol Gruppo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedas Homes and Unipol Gruppo
The main advantage of trading using opposite Aedas Homes and Unipol Gruppo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes position performs unexpectedly, Unipol Gruppo 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 Unipol Gruppo will offset losses from the drop in Unipol Gruppo's long position.| Aedas Homes vs. CN DATANG C | Aedas Homes vs. Austevoll Seafood ASA | Aedas Homes vs. Cass Information Systems | Aedas Homes vs. Northern Data AG |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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