Correlation Between Entech SE and Union Technologies
Can any of the company-specific risk be diversified away by investing in both Entech SE and Union Technologies 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 Entech SE and Union Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entech SE SAS and Union Technologies Informatique, you can compare the effects of market volatilities on Entech SE and Union Technologies 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 Entech SE with a short position of Union Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entech SE and Union Technologies.
Diversification Opportunities for Entech SE and Union Technologies
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Entech and Union is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Entech SE SAS and Union Technologies Informatiqu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Technologies and Entech 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 Entech SE SAS are associated (or correlated) with Union Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Technologies has no effect on the direction of Entech SE i.e., Entech SE and Union Technologies go up and down completely randomly.
Pair Corralation between Entech SE and Union Technologies
Assuming the 90 days trading horizon Entech SE SAS is expected to under-perform the Union Technologies. In addition to that, Entech SE is 1.27 times more volatile than Union Technologies Informatique. It trades about -0.05 of its total potential returns per unit of risk. Union Technologies Informatique is currently generating about 0.13 per unit of volatility. If you would invest 20.00 in Union Technologies Informatique on September 5, 2024 and sell it today you would earn a total of 2.00 from holding Union Technologies Informatique or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entech SE SAS vs. Union Technologies Informatiqu
Performance |
| Timeline |
| Entech SE SAS |
| Union Technologies |
Entech SE and Union Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entech SE and Union Technologies
The main advantage of trading using opposite Entech SE and Union Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entech SE position performs unexpectedly, Union Technologies 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 Union Technologies will offset losses from the drop in Union Technologies' long position.| Entech SE vs. Afyren SAS | Entech SE vs. Voltalia SA | Entech SE vs. Waga Energy SA | Entech SE vs. Haffner Energy SA |
| Union Technologies vs. ACTEOS SA | Union Technologies vs. SQLI SA | Union Technologies vs. Memscap Regpt | Union Technologies vs. Linedata Services SA |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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