Correlation Between Union Technologies and Linedata Services
Can any of the company-specific risk be diversified away by investing in both Union Technologies and Linedata Services 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 Linedata Services 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 Linedata Services SA, you can compare the effects of market volatilities on Union Technologies and Linedata Services 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 Linedata Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Technologies and Linedata Services.
Diversification Opportunities for Union Technologies and Linedata Services
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Union and Linedata is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Union Technologies Informatiqu and Linedata Services SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linedata Services 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 Linedata Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linedata Services has no effect on the direction of Union Technologies i.e., Union Technologies and Linedata Services go up and down completely randomly.
Pair Corralation between Union Technologies and Linedata Services
Assuming the 90 days trading horizon Union Technologies Informatique is expected to generate 3.59 times more return on investment than Linedata Services. However, Union Technologies is 3.59 times more volatile than Linedata Services SA. It trades about 0.02 of its potential returns per unit of risk. Linedata Services SA is currently generating about 0.04 per unit of risk. If you would invest 20.00 in Union Technologies Informatique on August 30, 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Technologies Informatiqu vs. Linedata Services SA
Performance |
| Timeline |
| Union Technologies |
| Linedata Services |
Union Technologies and Linedata Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Technologies and Linedata Services
The main advantage of trading using opposite Union Technologies and Linedata Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Technologies position performs unexpectedly, Linedata Services 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 Linedata Services will offset losses from the drop in Linedata Services' long position.| Union Technologies vs. ACTEOS SA | Union Technologies vs. SQLI SA | Union Technologies vs. Memscap Regpt | Union Technologies vs. Linedata Services 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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