Correlation Between UET United and EON SE
Can any of the company-specific risk be diversified away by investing in both UET United and EON SE 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 EON SE 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 EON SE, you can compare the effects of market volatilities on UET United and EON SE 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 EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and EON SE.
Diversification Opportunities for UET United and EON SE
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between UET and EON is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE 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 EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of UET United i.e., UET United and EON SE go up and down completely randomly.
Pair Corralation between UET United and EON SE
Assuming the 90 days trading horizon UET United Electronic is expected to under-perform the EON SE. In addition to that, UET United is 2.5 times more volatile than EON SE. It trades about -0.05 of its total potential returns per unit of risk. EON SE is currently generating about 0.44 per unit of volatility. If you would invest 1,110 in EON SE on November 27, 2024 and sell it today you would earn a total of 95.00 from holding EON SE or generate 8.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UET United Electronic vs. EON SE
Performance |
| Timeline |
| UET United Electronic |
| EON SE |
UET United and EON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and EON SE
The main advantage of trading using opposite UET United and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United position performs unexpectedly, EON SE 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 EON SE will offset losses from the drop in EON SE's long position.| UET United vs. REINET INVESTMENTS SCA | UET United vs. PennyMac Mortgage Investment | UET United vs. MidCap Financial Investment | UET United vs. SEI Investments |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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