Correlation Between UNICREDIT SPA and OVERSEA CHINUNSPADR/2
Can any of the company-specific risk be diversified away by investing in both UNICREDIT SPA and OVERSEA CHINUNSPADR/2 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 UNICREDIT SPA and OVERSEA CHINUNSPADR/2 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNICREDIT SPA ADR and OVERSEA CHINUNSPADR2, you can compare the effects of market volatilities on UNICREDIT SPA and OVERSEA CHINUNSPADR/2 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 UNICREDIT SPA with a short position of OVERSEA CHINUNSPADR/2. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNICREDIT SPA and OVERSEA CHINUNSPADR/2.
Diversification Opportunities for UNICREDIT SPA and OVERSEA CHINUNSPADR/2
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between UNICREDIT and OVERSEA is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding UNICREDIT SPA ADR and OVERSEA CHINUNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OVERSEA CHINUNSPADR/2 and UNICREDIT SPA 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 UNICREDIT SPA ADR are associated (or correlated) with OVERSEA CHINUNSPADR/2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OVERSEA CHINUNSPADR/2 has no effect on the direction of UNICREDIT SPA i.e., UNICREDIT SPA and OVERSEA CHINUNSPADR/2 go up and down completely randomly.
Pair Corralation between UNICREDIT SPA and OVERSEA CHINUNSPADR/2
Assuming the 90 days trading horizon UNICREDIT SPA is expected to generate 2.77 times less return on investment than OVERSEA CHINUNSPADR/2. In addition to that, UNICREDIT SPA is 1.66 times more volatile than OVERSEA CHINUNSPADR2. It trades about 0.04 of its total potential returns per unit of risk. OVERSEA CHINUNSPADR2 is currently generating about 0.19 per unit of volatility. If you would invest 2,120 in OVERSEA CHINUNSPADR2 on October 20, 2024 and sell it today you would earn a total of 280.00 from holding OVERSEA CHINUNSPADR2 or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNICREDIT SPA ADR vs. OVERSEA CHINUNSPADR2
Performance |
| Timeline |
| UNICREDIT SPA ADR |
| OVERSEA CHINUNSPADR/2 |
UNICREDIT SPA and OVERSEA CHINUNSPADR/2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNICREDIT SPA and OVERSEA CHINUNSPADR/2
The main advantage of trading using opposite UNICREDIT SPA and OVERSEA CHINUNSPADR/2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNICREDIT SPA position performs unexpectedly, OVERSEA CHINUNSPADR/2 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 OVERSEA CHINUNSPADR/2 will offset losses from the drop in OVERSEA CHINUNSPADR/2's long position.| UNICREDIT SPA vs. GigaMedia | UNICREDIT SPA vs. Scientific Games | UNICREDIT SPA vs. Media and Games | UNICREDIT SPA vs. PLAYMATES TOYS |
| OVERSEA CHINUNSPADR/2 vs. AOYAMA TRADING | OVERSEA CHINUNSPADR/2 vs. COFCO Joycome Foods | OVERSEA CHINUNSPADR/2 vs. United Natural Foods | OVERSEA CHINUNSPADR/2 vs. Cal Maine Foods |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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