Correlation Between Strategic Investments and United Internet
Can any of the company-specific risk be diversified away by investing in both Strategic Investments and United Internet 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 Strategic Investments and United Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and United Internet AG, you can compare the effects of market volatilities on Strategic Investments and United Internet 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 Strategic Investments with a short position of United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and United Internet.
Diversification Opportunities for Strategic Investments and United Internet
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Strategic and United is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG and Strategic Investments 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 Strategic Investments AS are associated (or correlated) with United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of Strategic Investments i.e., Strategic Investments and United Internet go up and down completely randomly.
Pair Corralation between Strategic Investments and United Internet
Assuming the 90 days horizon Strategic Investments AS is expected to generate 2.28 times more return on investment than United Internet. However, Strategic Investments is 2.28 times more volatile than United Internet AG. It trades about 0.04 of its potential returns per unit of risk. United Internet AG is currently generating about -0.02 per unit of risk. If you would invest 9.15 in Strategic Investments AS on September 28, 2024 and sell it today you would earn a total of 4.85 from holding Strategic Investments AS or generate 53.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. United Internet AG
Performance |
| Timeline |
| Strategic Investments |
| United Internet AG |
Strategic Investments and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and United Internet
The main advantage of trading using opposite Strategic Investments and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments position performs unexpectedly, United Internet 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 Internet will offset losses from the drop in United Internet's long position.| Strategic Investments vs. Blackstone Group | Strategic Investments vs. The Bank of | Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. T Rowe Price |
| United Internet vs. T Mobile | United Internet vs. ATT Inc | United Internet vs. Deutsche Telekom AG | United Internet vs. Deutsche Telekom AG |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |