Correlation Between UNICREDIT SPA and Skandinaviska Enskilda
Can any of the company-specific risk be diversified away by investing in both UNICREDIT SPA and Skandinaviska Enskilda 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 Skandinaviska Enskilda 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 Skandinaviska Enskilda Banken, you can compare the effects of market volatilities on UNICREDIT SPA and Skandinaviska Enskilda 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 Skandinaviska Enskilda. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNICREDIT SPA and Skandinaviska Enskilda.
Diversification Opportunities for UNICREDIT SPA and Skandinaviska Enskilda
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UNICREDIT and Skandinaviska is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding UNICREDIT SPA ADR and Skandinaviska Enskilda Banken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skandinaviska Enskilda 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 Skandinaviska Enskilda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skandinaviska Enskilda has no effect on the direction of UNICREDIT SPA i.e., UNICREDIT SPA and Skandinaviska Enskilda go up and down completely randomly.
Pair Corralation between UNICREDIT SPA and Skandinaviska Enskilda
Assuming the 90 days trading horizon UNICREDIT SPA ADR is expected to generate 1.19 times more return on investment than Skandinaviska Enskilda. However, UNICREDIT SPA is 1.19 times more volatile than Skandinaviska Enskilda Banken. It trades about 0.1 of its potential returns per unit of risk. Skandinaviska Enskilda Banken is currently generating about 0.01 per unit of risk. If you would invest 1,900 in UNICREDIT SPA ADR on October 31, 2024 and sell it today you would earn a total of 260.00 from holding UNICREDIT SPA ADR or generate 13.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNICREDIT SPA ADR vs. Skandinaviska Enskilda Banken
Performance |
| Timeline |
| UNICREDIT SPA ADR |
| Skandinaviska Enskilda |
UNICREDIT SPA and Skandinaviska Enskilda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNICREDIT SPA and Skandinaviska Enskilda
The main advantage of trading using opposite UNICREDIT SPA and Skandinaviska Enskilda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNICREDIT SPA position performs unexpectedly, Skandinaviska Enskilda 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 Skandinaviska Enskilda will offset losses from the drop in Skandinaviska Enskilda's long position.| UNICREDIT SPA vs. Lamar Advertising | UNICREDIT SPA vs. Salesforce | UNICREDIT SPA vs. CAL MAINE FOODS | UNICREDIT SPA vs. YATRA ONLINE DL 0001 |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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