Correlation Between Globe Trade and UniCredit SpA
Can any of the company-specific risk be diversified away by investing in both Globe Trade and UniCredit SpA 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 Globe Trade and UniCredit SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Trade Centre and UniCredit SpA, you can compare the effects of market volatilities on Globe Trade and UniCredit SpA 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 Globe Trade with a short position of UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and UniCredit SpA.
Diversification Opportunities for Globe Trade and UniCredit SpA
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Globe and UniCredit is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA and Globe Trade 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 Globe Trade Centre are associated (or correlated) with UniCredit SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit SpA has no effect on the direction of Globe Trade i.e., Globe Trade and UniCredit SpA go up and down completely randomly.
Pair Corralation between Globe Trade and UniCredit SpA
Assuming the 90 days trading horizon Globe Trade Centre is expected to under-perform the UniCredit SpA. In addition to that, Globe Trade is 1.19 times more volatile than UniCredit SpA. It trades about -0.03 of its total potential returns per unit of risk. UniCredit SpA is currently generating about 0.09 per unit of volatility. If you would invest 12,430 in UniCredit SpA on August 27, 2024 and sell it today you would earn a total of 3,950 from holding UniCredit SpA or generate 31.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.68% |
| Values | Daily Returns |
Globe Trade Centre vs. UniCredit SpA
Performance |
| Timeline |
| Globe Trade Centre |
| UniCredit SpA |
Globe Trade and UniCredit SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Trade and UniCredit SpA
The main advantage of trading using opposite Globe Trade and UniCredit SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Trade position performs unexpectedly, UniCredit SpA 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 UniCredit SpA will offset losses from the drop in UniCredit SpA's long position.| Globe Trade vs. Asseco Business Solutions | Globe Trade vs. Detalion Games SA | Globe Trade vs. Asseco South Eastern | Globe Trade vs. CFI Holding 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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