Correlation Between Centrum Finansowe and UniCredit SpA
Can any of the company-specific risk be diversified away by investing in both Centrum Finansowe and UniCredit SpA 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 Centrum Finansowe and UniCredit SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrum Finansowe Banku and UniCredit SpA, you can compare the effects of market volatilities on Centrum Finansowe and UniCredit SpA 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 Centrum Finansowe with a short position of UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrum Finansowe and UniCredit SpA.
Diversification Opportunities for Centrum Finansowe and UniCredit SpA
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Centrum and UniCredit is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Centrum Finansowe Banku and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA and Centrum Finansowe 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 Centrum Finansowe Banku are associated (or correlated) with UniCredit SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit SpA has no effect on the direction of Centrum Finansowe i.e., Centrum Finansowe and UniCredit SpA go up and down completely randomly.
Pair Corralation between Centrum Finansowe and UniCredit SpA
Assuming the 90 days trading horizon Centrum Finansowe Banku is expected to generate 1.13 times more return on investment than UniCredit SpA. However, Centrum Finansowe is 1.13 times more volatile than UniCredit SpA. It trades about 0.01 of its potential returns per unit of risk. UniCredit SpA is currently generating about -0.21 per unit of risk. If you would invest 545.00 in Centrum Finansowe Banku on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Centrum Finansowe Banku or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 84.21% |
| Values | Daily Returns |
Centrum Finansowe Banku vs. UniCredit SpA
Performance |
| Timeline |
| Centrum Finansowe Banku |
| UniCredit SpA |
Centrum Finansowe and UniCredit SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrum Finansowe and UniCredit SpA
The main advantage of trading using opposite Centrum Finansowe and UniCredit SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrum Finansowe position performs unexpectedly, UniCredit SpA 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 UniCredit SpA will offset losses from the drop in UniCredit SpA's long position.| Centrum Finansowe vs. Carlson Investments SA | Centrum Finansowe vs. Asseco Business Solutions | Centrum Finansowe vs. Detalion Games SA | Centrum Finansowe vs. Asseco South Eastern |
| UniCredit SpA vs. SOFTWARE MANSION SPOLKA | UniCredit SpA vs. Skyline Investment SA | UniCredit SpA vs. Quantum Software SA | UniCredit SpA vs. PZ Cormay SA |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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