Correlation Between Netmedia Group and Union Technologies
Can any of the company-specific risk be diversified away by investing in both Netmedia Group 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 Netmedia Group and Union Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Netmedia Group SA and Union Technologies Informatique, you can compare the effects of market volatilities on Netmedia Group 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 Netmedia Group with a short position of Union Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Netmedia Group and Union Technologies.
Diversification Opportunities for Netmedia Group and Union Technologies
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Netmedia and Union is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Netmedia Group SA and Union Technologies Informatiqu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Technologies and Netmedia Group 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 Netmedia Group SA 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 Netmedia Group i.e., Netmedia Group and Union Technologies go up and down completely randomly.
Pair Corralation between Netmedia Group and Union Technologies
Assuming the 90 days trading horizon Netmedia Group SA is expected to under-perform the Union Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Netmedia Group SA is 1.04 times less risky than Union Technologies. The stock trades about -0.07 of its potential returns per unit of risk. The Union Technologies Informatique is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Union Technologies Informatique on September 3, 2024 and sell it today you would lose (36.00) from holding Union Technologies Informatique or give up 64.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Netmedia Group SA vs. Union Technologies Informatiqu
Performance |
| Timeline |
| Netmedia Group SA |
| Union Technologies |
Netmedia Group and Union Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Netmedia Group and Union Technologies
The main advantage of trading using opposite Netmedia Group and Union Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Netmedia Group 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.| Netmedia Group vs. Kaufman Et Broad | Netmedia Group vs. CMG Cleantech SA | Netmedia Group vs. Metalliance SA | Netmedia Group vs. X Fab Silicon |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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