Correlation Between Auction Technology and United Internet
Can any of the company-specific risk be diversified away by investing in both Auction Technology and United Internet 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 Auction Technology and United Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auction Technology Group and United Internet AG, you can compare the effects of market volatilities on Auction Technology and United Internet 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 Auction Technology with a short position of United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auction Technology and United Internet.
Diversification Opportunities for Auction Technology and United Internet
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Auction and United is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Auction Technology Group and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG and Auction Technology 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 Auction Technology Group are associated (or correlated) with United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of Auction Technology i.e., Auction Technology and United Internet go up and down completely randomly.
Pair Corralation between Auction Technology and United Internet
Assuming the 90 days trading horizon Auction Technology Group is expected to generate 1.53 times more return on investment than United Internet. However, Auction Technology is 1.53 times more volatile than United Internet AG. It trades about 0.22 of its potential returns per unit of risk. United Internet AG is currently generating about -0.06 per unit of risk. If you would invest 51,600 in Auction Technology Group on October 30, 2024 and sell it today you would earn a total of 8,900 from holding Auction Technology Group or generate 17.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auction Technology Group vs. United Internet AG
Performance |
| Timeline |
| Auction Technology |
| United Internet AG |
Auction Technology and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auction Technology and United Internet
The main advantage of trading using opposite Auction Technology and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auction Technology position performs unexpectedly, United Internet 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 Internet will offset losses from the drop in United Internet's long position.| Auction Technology vs. Toyota Motor Corp | Auction Technology vs. SoftBank Group Corp | Auction Technology vs. Halyk Bank of | Auction Technology vs. Samsung Electronics Co |
| United Internet vs. Smithson Investment Trust | United Internet vs. Tavistock Investments Plc | United Internet vs. Elmos Semiconductor SE | United Internet vs. Compagnie Plastic Omnium |
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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