Correlation Between FC Investment and Uniper SE
Can any of the company-specific risk be diversified away by investing in both FC Investment 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 FC Investment and Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FC Investment Trust and Uniper SE, you can compare the effects of market volatilities on FC Investment 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 FC Investment with a short position of Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FC Investment and Uniper SE.
Diversification Opportunities for FC Investment and Uniper SE
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FCIT and Uniper is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding FC Investment Trust and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and FC Investment 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 FC Investment Trust 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 FC Investment i.e., FC Investment and Uniper SE go up and down completely randomly.
Pair Corralation between FC Investment and Uniper SE
Assuming the 90 days trading horizon FC Investment Trust is expected to generate 0.25 times more return on investment than Uniper SE. However, FC Investment Trust is 3.98 times less risky than Uniper SE. It trades about 0.09 of its potential returns per unit of risk. Uniper SE is currently generating about -0.06 per unit of risk. If you would invest 87,562 in FC Investment Trust on September 4, 2024 and sell it today you would earn a total of 25,638 from holding FC Investment Trust or generate 29.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FC Investment Trust vs. Uniper SE
Performance |
| Timeline |
| FC Investment Trust |
| Uniper SE |
FC Investment and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FC Investment and Uniper SE
The main advantage of trading using opposite FC Investment and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FC Investment 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.| FC Investment vs. SupplyMe Capital PLC | FC Investment vs. Lloyds Banking Group | FC Investment vs. Premier African Minerals | FC Investment vs. SANTANDER UK 8 |
| Uniper SE vs. Eco Animal Health | Uniper SE vs. Worldwide Healthcare Trust | Uniper SE vs. Cairo Communication SpA | Uniper SE vs. Inspiration Healthcare Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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