Correlation Between Canadian General and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Canadian General and Uniper 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 Canadian General and Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian General Investments and Uniper SE, you can compare the effects of market volatilities on Canadian General and Uniper 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 Canadian General with a short position of Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Uniper SE.
Diversification Opportunities for Canadian General and Uniper SE
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canadian and Uniper is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and Canadian General 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 Canadian General Investments are associated (or correlated) with Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Canadian General i.e., Canadian General and Uniper SE go up and down completely randomly.
Pair Corralation between Canadian General and Uniper SE
Assuming the 90 days trading horizon Canadian General is expected to generate 1.75 times less return on investment than Uniper SE. In addition to that, Canadian General is 1.22 times more volatile than Uniper SE. It trades about 0.08 of its total potential returns per unit of risk. Uniper SE is currently generating about 0.17 per unit of volatility. If you would invest 4,154 in Uniper SE on November 4, 2024 and sell it today you would earn a total of 263.00 from holding Uniper SE or generate 6.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Canadian General Investments vs. Uniper SE
Performance |
| Timeline |
| Canadian General Inv |
| Uniper SE |
Canadian General and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Uniper SE
The main advantage of trading using opposite Canadian General and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Uniper 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 Uniper SE will offset losses from the drop in Uniper SE's long position.| Canadian General vs. Spotify Technology SA | Canadian General vs. Monster Beverage Corp | Canadian General vs. Ebro Foods | Canadian General vs. National Beverage Corp |
| Uniper SE vs. Software Circle plc | Uniper SE vs. Micron Technology | Uniper SE vs. Sabre Insurance Group | Uniper SE vs. Darden Restaurants |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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