Correlation Between Detection Technology and United Bankers
Can any of the company-specific risk be diversified away by investing in both Detection Technology and United Bankers 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 Detection Technology and United Bankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Detection Technology OY and United Bankers Oyj, you can compare the effects of market volatilities on Detection Technology and United Bankers 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 Detection Technology with a short position of United Bankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Detection Technology and United Bankers.
Diversification Opportunities for Detection Technology and United Bankers
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Detection and United is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Detection Technology OY and United Bankers Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Bankers Oyj and Detection Technology 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 Detection Technology OY are associated (or correlated) with United Bankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Bankers Oyj has no effect on the direction of Detection Technology i.e., Detection Technology and United Bankers go up and down completely randomly.
Pair Corralation between Detection Technology and United Bankers
Assuming the 90 days trading horizon Detection Technology OY is expected to under-perform the United Bankers. In addition to that, Detection Technology is 1.09 times more volatile than United Bankers Oyj. It trades about -0.56 of its total potential returns per unit of risk. United Bankers Oyj is currently generating about 0.04 per unit of volatility. If you would invest 1,800 in United Bankers Oyj on August 27, 2024 and sell it today you would earn a total of 20.00 from holding United Bankers Oyj or generate 1.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Detection Technology OY vs. United Bankers Oyj
Performance |
| Timeline |
| Detection Technology |
| United Bankers Oyj |
Detection Technology and United Bankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Detection Technology and United Bankers
The main advantage of trading using opposite Detection Technology and United Bankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Detection Technology position performs unexpectedly, United Bankers 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 United Bankers will offset losses from the drop in United Bankers' long position.| Detection Technology vs. Revenio Group | Detection Technology vs. Remedy Entertainment Oyj | Detection Technology vs. Bittium Oyj | Detection Technology vs. Gofore Oyj |
| United Bankers vs. Vaisala Oyj A | United Bankers vs. CapMan Oyj B | United Bankers vs. HKFoods Oyj A | United Bankers vs. KONE Oyj |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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