Correlation Between Alfa Financial and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Uniper SE, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Uniper SE.
Diversification Opportunities for Alfa Financial and Uniper SE
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alfa and Uniper is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and Uniper SE go up and down completely randomly.
Pair Corralation between Alfa Financial and Uniper SE
Assuming the 90 days trading horizon Alfa Financial Software is expected to under-perform the Uniper SE. But the stock apears to be less risky and, when comparing its historical volatility, Alfa Financial Software is 2.52 times less risky than Uniper SE. The stock trades about -0.4 of its potential returns per unit of risk. The Uniper SE is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,939 in Uniper SE on October 24, 2024 and sell it today you would earn a total of 508.00 from holding Uniper SE or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Uniper SE
Performance |
| Timeline |
| Alfa Financial Software |
| Uniper SE |
Alfa Financial and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Uniper SE
The main advantage of trading using opposite Alfa Financial and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. Home Depot | Alfa Financial vs. Weiss Korea Opportunity | Alfa Financial vs. River and Mercantile | Alfa Financial vs. Chrysalis Investments |
| Uniper SE vs. Ashtead Technology Holdings | Uniper SE vs. Sunny Optical Technology | Uniper SE vs. Alfa Financial Software | Uniper SE vs. Accesso Technology Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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