Correlation Between UET United and Nel ASA
Can any of the company-specific risk be diversified away by investing in both UET United and Nel ASA 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 UET United and Nel ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UET United Electronic and Nel ASA, you can compare the effects of market volatilities on UET United and Nel ASA 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 UET United with a short position of Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and Nel ASA.
Diversification Opportunities for UET United and Nel ASA
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UET and Nel is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA and UET United 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 UET United Electronic are associated (or correlated) with Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of UET United i.e., UET United and Nel ASA go up and down completely randomly.
Pair Corralation between UET United and Nel ASA
Assuming the 90 days trading horizon UET United Electronic is expected to generate 1.02 times more return on investment than Nel ASA. However, UET United is 1.02 times more volatile than Nel ASA. It trades about 0.06 of its potential returns per unit of risk. Nel ASA is currently generating about -0.14 per unit of risk. If you would invest 91.00 in UET United Electronic on November 2, 2024 and sell it today you would earn a total of 4.00 from holding UET United Electronic or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UET United Electronic vs. Nel ASA
Performance |
| Timeline |
| UET United Electronic |
| Nel ASA |
UET United and Nel ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and Nel ASA
The main advantage of trading using opposite UET United and Nel ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United position performs unexpectedly, Nel ASA 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 Nel ASA will offset losses from the drop in Nel ASA's long position.| UET United vs. MTY Food Group | UET United vs. CarsalesCom | UET United vs. Cal Maine Foods | UET United vs. Lamar Advertising |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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