Correlation Between GURU ORGANIC and United Internet
Can any of the company-specific risk be diversified away by investing in both GURU ORGANIC and United Internet 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 GURU ORGANIC and United Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GURU ORGANIC ENERGY and United Internet AG, you can compare the effects of market volatilities on GURU ORGANIC and United Internet 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 GURU ORGANIC with a short position of United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of GURU ORGANIC and United Internet.
Diversification Opportunities for GURU ORGANIC and United Internet
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GURU and United is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding GURU ORGANIC ENERGY and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG and GURU ORGANIC 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 GURU ORGANIC ENERGY are associated (or correlated) with United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of GURU ORGANIC i.e., GURU ORGANIC and United Internet go up and down completely randomly.
Pair Corralation between GURU ORGANIC and United Internet
Assuming the 90 days horizon GURU ORGANIC ENERGY is expected to generate 2.21 times more return on investment than United Internet. However, GURU ORGANIC is 2.21 times more volatile than United Internet AG. It trades about 0.03 of its potential returns per unit of risk. United Internet AG is currently generating about -0.08 per unit of risk. If you would invest 108.00 in GURU ORGANIC ENERGY on November 6, 2024 and sell it today you would earn a total of 3.00 from holding GURU ORGANIC ENERGY or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GURU ORGANIC ENERGY vs. United Internet AG
Performance |
| Timeline |
| GURU ORGANIC ENERGY |
| United Internet AG |
GURU ORGANIC and United Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GURU ORGANIC and United Internet
The main advantage of trading using opposite GURU ORGANIC and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GURU ORGANIC position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.| GURU ORGANIC vs. Retail Estates NV | GURU ORGANIC vs. TRADEDOUBLER AB SK | GURU ORGANIC vs. CARSALESCOM | GURU ORGANIC vs. SIDETRADE EO 1 |
| United Internet vs. Chunghwa Telecom Co | United Internet vs. PURE FOODS TASMANIA | United Internet vs. Zoom Video Communications | United Internet vs. Ribbon Communications |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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