Correlation Between MEITUAN UNSPADR2B and UNIPHAR PLC
Can any of the company-specific risk be diversified away by investing in both MEITUAN UNSPADR2B and UNIPHAR PLC 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 MEITUAN UNSPADR2B and UNIPHAR PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEITUAN UNSPADR2B and UNIPHAR PLC EO, you can compare the effects of market volatilities on MEITUAN UNSPADR2B and UNIPHAR PLC 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 MEITUAN UNSPADR2B with a short position of UNIPHAR PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEITUAN UNSPADR2B and UNIPHAR PLC.
Diversification Opportunities for MEITUAN UNSPADR2B and UNIPHAR PLC
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MEITUAN and UNIPHAR is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding MEITUAN UNSPADR2B and UNIPHAR PLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIPHAR PLC EO and MEITUAN UNSPADR2B 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 MEITUAN UNSPADR2B are associated (or correlated) with UNIPHAR PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIPHAR PLC EO has no effect on the direction of MEITUAN UNSPADR2B i.e., MEITUAN UNSPADR2B and UNIPHAR PLC go up and down completely randomly.
Pair Corralation between MEITUAN UNSPADR2B and UNIPHAR PLC
Assuming the 90 days trading horizon MEITUAN UNSPADR2B is expected to generate 2.98 times more return on investment than UNIPHAR PLC. However, MEITUAN UNSPADR2B is 2.98 times more volatile than UNIPHAR PLC EO. It trades about 0.06 of its potential returns per unit of risk. UNIPHAR PLC EO is currently generating about -0.2 per unit of risk. If you would invest 3,880 in MEITUAN UNSPADR2B on August 30, 2024 and sell it today you would earn a total of 300.00 from holding MEITUAN UNSPADR2B or generate 7.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
MEITUAN UNSPADR2B vs. UNIPHAR PLC EO
Performance |
| Timeline |
| MEITUAN UNSPADR2B |
| UNIPHAR PLC EO |
MEITUAN UNSPADR2B and UNIPHAR PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEITUAN UNSPADR2B and UNIPHAR PLC
The main advantage of trading using opposite MEITUAN UNSPADR2B and UNIPHAR PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEITUAN UNSPADR2B position performs unexpectedly, UNIPHAR PLC 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 UNIPHAR PLC will offset losses from the drop in UNIPHAR PLC's long position.| MEITUAN UNSPADR2B vs. Amazon Inc | MEITUAN UNSPADR2B vs. Amazon Inc | MEITUAN UNSPADR2B vs. Alibaba Group Holdings | MEITUAN UNSPADR2B vs. JD Inc Adr |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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