Correlation Between Unifique Telecomunicaes and Bread Financial
Can any of the company-specific risk be diversified away by investing in both Unifique Telecomunicaes and Bread Financial 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 Unifique Telecomunicaes and Bread Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unifique Telecomunicaes SA and Bread Financial Holdings, you can compare the effects of market volatilities on Unifique Telecomunicaes and Bread Financial 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 Unifique Telecomunicaes with a short position of Bread Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unifique Telecomunicaes and Bread Financial.
Diversification Opportunities for Unifique Telecomunicaes and Bread Financial
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Unifique and Bread is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Unifique Telecomunicaes SA and Bread Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bread Financial Holdings and Unifique Telecomunicaes 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 Unifique Telecomunicaes SA are associated (or correlated) with Bread Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bread Financial Holdings has no effect on the direction of Unifique Telecomunicaes i.e., Unifique Telecomunicaes and Bread Financial go up and down completely randomly.
Pair Corralation between Unifique Telecomunicaes and Bread Financial
Assuming the 90 days trading horizon Unifique Telecomunicaes SA is expected to generate 1.0 times more return on investment than Bread Financial. However, Unifique Telecomunicaes SA is 1.0 times less risky than Bread Financial. It trades about -0.01 of its potential returns per unit of risk. Bread Financial Holdings is currently generating about -0.02 per unit of risk. If you would invest 342.00 in Unifique Telecomunicaes SA on October 20, 2024 and sell it today you would lose (2.00) from holding Unifique Telecomunicaes SA or give up 0.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unifique Telecomunicaes SA vs. Bread Financial Holdings
Performance |
| Timeline |
| Unifique Telecomunicaes |
| Bread Financial Holdings |
Unifique Telecomunicaes and Bread Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unifique Telecomunicaes and Bread Financial
The main advantage of trading using opposite Unifique Telecomunicaes and Bread Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unifique Telecomunicaes position performs unexpectedly, Bread Financial 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 Bread Financial will offset losses from the drop in Bread Financial's long position.| Unifique Telecomunicaes vs. Air Products and | Unifique Telecomunicaes vs. MAHLE Metal Leve | Unifique Telecomunicaes vs. CM Hospitalar SA | Unifique Telecomunicaes vs. Pentair plc |
| Bread Financial vs. CRISPR Therapeutics AG | Bread Financial vs. Verizon Communications | Bread Financial vs. Fresenius Medical Care | Bread Financial vs. Unifique Telecomunicaes SA |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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