Correlation Between UET United and SPORT LISBOA
Can any of the company-specific risk be diversified away by investing in both UET United and SPORT LISBOA 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 SPORT LISBOA 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 SPORT LISBOA E, you can compare the effects of market volatilities on UET United and SPORT LISBOA 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 SPORT LISBOA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UET United and SPORT LISBOA.
Diversification Opportunities for UET United and SPORT LISBOA
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UET and SPORT is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding UET United Electronic and SPORT LISBOA E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORT LISBOA E 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 SPORT LISBOA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORT LISBOA E has no effect on the direction of UET United i.e., UET United and SPORT LISBOA go up and down completely randomly.
Pair Corralation between UET United and SPORT LISBOA
Assuming the 90 days trading horizon UET United Electronic is expected to generate 3.02 times more return on investment than SPORT LISBOA. However, UET United is 3.02 times more volatile than SPORT LISBOA E. It trades about 0.16 of its potential returns per unit of risk. SPORT LISBOA E is currently generating about 0.14 per unit of risk. If you would invest 81.00 in UET United Electronic on September 5, 2024 and sell it today you would earn a total of 17.00 from holding UET United Electronic or generate 20.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
UET United Electronic vs. SPORT LISBOA E
Performance |
| Timeline |
| UET United Electronic |
| SPORT LISBOA E |
UET United and SPORT LISBOA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UET United and SPORT LISBOA
The main advantage of trading using opposite UET United and SPORT LISBOA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UET United position performs unexpectedly, SPORT LISBOA 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 SPORT LISBOA will offset losses from the drop in SPORT LISBOA's long position.| UET United vs. HANOVER INSURANCE | UET United vs. The Hanover Insurance | UET United vs. ZURICH INSURANCE GROUP | UET United vs. CENTURIA OFFICE REIT |
| SPORT LISBOA vs. G8 EDUCATION | SPORT LISBOA vs. Strategic Education | SPORT LISBOA vs. IDP EDUCATION LTD | SPORT LISBOA vs. American Public Education |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |