Correlation Between Union Technologies and ALD SA
Can any of the company-specific risk be diversified away by investing in both Union Technologies and ALD SA 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 Union Technologies and ALD SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Technologies Informatique and ALD SA, you can compare the effects of market volatilities on Union Technologies and ALD SA 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 Union Technologies with a short position of ALD SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Technologies and ALD SA.
Diversification Opportunities for Union Technologies and ALD SA
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Union and ALD is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Union Technologies Informatiqu and ALD SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALD SA and Union Technologies 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 Union Technologies Informatique are associated (or correlated) with ALD SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALD SA has no effect on the direction of Union Technologies i.e., Union Technologies and ALD SA go up and down completely randomly.
Pair Corralation between Union Technologies and ALD SA
Assuming the 90 days trading horizon Union Technologies is expected to generate 1.58 times less return on investment than ALD SA. In addition to that, Union Technologies is 2.12 times more volatile than ALD SA. It trades about 0.07 of its total potential returns per unit of risk. ALD SA is currently generating about 0.24 per unit of volatility. If you would invest 624.00 in ALD SA on October 25, 2024 and sell it today you would earn a total of 78.00 from holding ALD SA or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Technologies Informatiqu vs. ALD SA
Performance |
| Timeline |
| Union Technologies |
| ALD SA |
Union Technologies and ALD SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Technologies and ALD SA
The main advantage of trading using opposite Union Technologies and ALD SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Technologies position performs unexpectedly, ALD SA 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 ALD SA will offset losses from the drop in ALD SA's long position.| Union Technologies vs. ACTEOS SA | Union Technologies vs. Memscap Regpt | Union Technologies vs. Linedata Services SA | Union Technologies vs. Lectra SA |
| ALD SA vs. Gaztransport Technigaz SAS | ALD SA vs. Union Technologies Informatique | ALD SA vs. Affluent Medical SAS | ALD SA vs. Sartorius Stedim Biotech |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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