Correlation Between Apax Global and United Utilities
Can any of the company-specific risk be diversified away by investing in both Apax Global and United Utilities 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 Apax Global and United Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apax Global Alpha and United Utilities Group, you can compare the effects of market volatilities on Apax Global and United Utilities 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 Apax Global with a short position of United Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apax Global and United Utilities.
Diversification Opportunities for Apax Global and United Utilities
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Apax and United is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Apax Global Alpha and United Utilities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Utilities and Apax Global 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 Apax Global Alpha are associated (or correlated) with United Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Utilities has no effect on the direction of Apax Global i.e., Apax Global and United Utilities go up and down completely randomly.
Pair Corralation between Apax Global and United Utilities
Assuming the 90 days trading horizon Apax Global Alpha is expected to under-perform the United Utilities. But the stock apears to be less risky and, when comparing its historical volatility, Apax Global Alpha is 1.16 times less risky than United Utilities. The stock trades about 0.0 of its potential returns per unit of risk. The United Utilities Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 97,168 in United Utilities Group on November 3, 2024 and sell it today you would earn a total of 5,132 from holding United Utilities Group or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apax Global Alpha vs. United Utilities Group
Performance |
| Timeline |
| Apax Global Alpha |
| United Utilities |
Apax Global and United Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apax Global and United Utilities
The main advantage of trading using opposite Apax Global and United Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apax Global position performs unexpectedly, United Utilities 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 United Utilities will offset losses from the drop in United Utilities' long position.| Apax Global vs. CVS Health Corp | Apax Global vs. Inspiration Healthcare Group | Apax Global vs. Universal Health Services | Apax Global vs. National Beverage Corp |
| United Utilities vs. Inspiration Healthcare Group | United Utilities vs. Naturhouse Health SA | United Utilities vs. Target Healthcare REIT | United Utilities vs. Sabre Insurance 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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