Correlation Between Brait SE and Universal Partners
Can any of the company-specific risk be diversified away by investing in both Brait SE and Universal Partners 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 Brait SE and Universal Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brait SE and Universal Partners, you can compare the effects of market volatilities on Brait SE and Universal Partners 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 Brait SE with a short position of Universal Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brait SE and Universal Partners.
Diversification Opportunities for Brait SE and Universal Partners
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brait and Universal is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Brait SE and Universal Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Partners and Brait SE 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 Brait SE are associated (or correlated) with Universal Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Partners has no effect on the direction of Brait SE i.e., Brait SE and Universal Partners go up and down completely randomly.
Pair Corralation between Brait SE and Universal Partners
Assuming the 90 days trading horizon Brait SE is expected to generate 0.91 times more return on investment than Universal Partners. However, Brait SE is 1.09 times less risky than Universal Partners. It trades about 0.43 of its potential returns per unit of risk. Universal Partners is currently generating about -0.08 per unit of risk. If you would invest 16,000 in Brait SE on September 2, 2024 and sell it today you would earn a total of 4,100 from holding Brait SE or generate 25.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Brait SE vs. Universal Partners
Performance |
| Timeline |
| Brait SE |
| Universal Partners |
Brait SE and Universal Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brait SE and Universal Partners
The main advantage of trading using opposite Brait SE and Universal Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brait SE position performs unexpectedly, Universal Partners 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 Universal Partners will offset losses from the drop in Universal Partners' long position.| Brait SE vs. Trematon Capital Investments | Brait SE vs. Master Drilling Group | Brait SE vs. RCL Foods | Brait SE vs. Advtech |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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