Correlation Between UET United and HomeToGo
Can any of the company-specific risk be diversified away by investing in both UET United and HomeToGo 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 HomeToGo 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 HomeToGo SE, you can compare the effects of market volatilities on UET United and HomeToGo 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 HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and HomeToGo.
Diversification Opportunities for UET United and HomeToGo
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UET and HomeToGo is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo 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 HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of UET United i.e., UET United and HomeToGo go up and down completely randomly.
Pair Corralation between UET United and HomeToGo
Assuming the 90 days trading horizon UET United Electronic is expected to generate 1.41 times more return on investment than HomeToGo. However, UET United is 1.41 times more volatile than HomeToGo SE. It trades about 0.04 of its potential returns per unit of risk. HomeToGo SE is currently generating about 0.01 per unit of risk. If you would invest 75.00 in UET United Electronic on August 25, 2024 and sell it today you would earn a total of 35.00 from holding UET United Electronic or generate 46.67% 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. HomeToGo SE
Performance |
| Timeline |
| UET United Electronic |
| HomeToGo SE |
UET United and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and HomeToGo
The main advantage of trading using opposite UET United and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.| UET United vs. Cisco Systems | UET United vs. Telefonaktiebolaget LM Ericsson | UET United vs. Superior Plus Corp | UET United vs. NMI Holdings |
| HomeToGo vs. ANTA SPORTS PRODUCT | HomeToGo vs. Universal Entertainment | HomeToGo vs. RCS MediaGroup SpA | HomeToGo vs. UNIVERSAL MUSIC GROUP |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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