Correlation Between Union Technologies and Eutelsat Communications
Can any of the company-specific risk be diversified away by investing in both Union Technologies and Eutelsat Communications 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 Eutelsat Communications 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 Eutelsat Communications SA, you can compare the effects of market volatilities on Union Technologies and Eutelsat Communications 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 Eutelsat Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Technologies and Eutelsat Communications.
Diversification Opportunities for Union Technologies and Eutelsat Communications
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Union and Eutelsat is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Union Technologies Informatiqu and Eutelsat Communications SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eutelsat Communications 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 Eutelsat Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eutelsat Communications has no effect on the direction of Union Technologies i.e., Union Technologies and Eutelsat Communications go up and down completely randomly.
Pair Corralation between Union Technologies and Eutelsat Communications
Assuming the 90 days trading horizon Union Technologies Informatique is expected to generate 1.3 times more return on investment than Eutelsat Communications. However, Union Technologies is 1.3 times more volatile than Eutelsat Communications SA. It trades about 0.02 of its potential returns per unit of risk. Eutelsat Communications SA is currently generating about -0.47 per unit of risk. If you would invest 20.00 in Union Technologies Informatique on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Union Technologies Informatique or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Technologies Informatiqu vs. Eutelsat Communications SA
Performance |
| Timeline |
| Union Technologies |
| Eutelsat Communications |
Union Technologies and Eutelsat Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Technologies and Eutelsat Communications
The main advantage of trading using opposite Union Technologies and Eutelsat Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Technologies position performs unexpectedly, Eutelsat Communications 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 Eutelsat Communications will offset losses from the drop in Eutelsat Communications' long position.| Union Technologies vs. Neurones | Union Technologies vs. Infotel SA | Union Technologies vs. Alten SA | Union Technologies vs. Manitou BF SA |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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