Correlation Between Aubay Socit and Union Technologies
Can any of the company-specific risk be diversified away by investing in both Aubay Socit 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 Aubay Socit and Union Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aubay Socit Anonyme and Union Technologies Informatique, you can compare the effects of market volatilities on Aubay Socit 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 Aubay Socit with a short position of Union Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aubay Socit and Union Technologies.
Diversification Opportunities for Aubay Socit and Union Technologies
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aubay and Union is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aubay Socit Anonyme and Union Technologies Informatiqu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Technologies and Aubay Socit 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 Aubay Socit Anonyme 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 Aubay Socit i.e., Aubay Socit and Union Technologies go up and down completely randomly.
Pair Corralation between Aubay Socit and Union Technologies
Assuming the 90 days trading horizon Aubay Socit Anonyme is expected to under-perform the Union Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Aubay Socit Anonyme is 3.75 times less risky than Union Technologies. The stock trades about -0.1 of its potential returns per unit of risk. The Union Technologies Informatique is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Union Technologies Informatique on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Union Technologies Informatique or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aubay Socit Anonyme vs. Union Technologies Informatiqu
Performance |
| Timeline |
| Aubay Socit Anonyme |
| Union Technologies |
Aubay Socit and Union Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aubay Socit and Union Technologies
The main advantage of trading using opposite Aubay Socit and Union Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aubay Socit 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.The idea behind Aubay Socit Anonyme and Union Technologies Informatique pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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