Correlation Between Unifique Telecomunicaes and MAHLE Metal
Can any of the company-specific risk be diversified away by investing in both Unifique Telecomunicaes and MAHLE Metal 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 MAHLE Metal 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 MAHLE Metal Leve, you can compare the effects of market volatilities on Unifique Telecomunicaes and MAHLE Metal 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 MAHLE Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unifique Telecomunicaes and MAHLE Metal.
Diversification Opportunities for Unifique Telecomunicaes and MAHLE Metal
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Unifique and MAHLE is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Unifique Telecomunicaes SA and MAHLE Metal Leve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAHLE Metal Leve 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 MAHLE Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAHLE Metal Leve has no effect on the direction of Unifique Telecomunicaes i.e., Unifique Telecomunicaes and MAHLE Metal go up and down completely randomly.
Pair Corralation between Unifique Telecomunicaes and MAHLE Metal
Assuming the 90 days trading horizon Unifique Telecomunicaes SA is expected to generate 1.47 times more return on investment than MAHLE Metal. However, Unifique Telecomunicaes is 1.47 times more volatile than MAHLE Metal Leve. It trades about 0.03 of its potential returns per unit of risk. MAHLE Metal Leve is currently generating about -0.07 per unit of risk. If you would invest 352.00 in Unifique Telecomunicaes SA on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Unifique Telecomunicaes SA or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unifique Telecomunicaes SA vs. MAHLE Metal Leve
Performance |
| Timeline |
| Unifique Telecomunicaes |
| MAHLE Metal Leve |
Unifique Telecomunicaes and MAHLE Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unifique Telecomunicaes and MAHLE Metal
The main advantage of trading using opposite Unifique Telecomunicaes and MAHLE Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unifique Telecomunicaes position performs unexpectedly, MAHLE Metal 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 MAHLE Metal will offset losses from the drop in MAHLE Metal's long position.| Unifique Telecomunicaes vs. Lupatech SA | Unifique Telecomunicaes vs. Rossi Residencial SA | Unifique Telecomunicaes vs. Usinas Siderrgicas de | Unifique Telecomunicaes vs. Refinaria de Petrleos |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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