Correlation Between Hansa Investment and Unite Group
Can any of the company-specific risk be diversified away by investing in both Hansa Investment and Unite Group 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 Hansa Investment and Unite Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansa Investment and Unite Group PLC, you can compare the effects of market volatilities on Hansa Investment and Unite Group 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 Hansa Investment with a short position of Unite Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Investment and Unite Group.
Diversification Opportunities for Hansa Investment and Unite Group
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hansa and Unite is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment and Unite Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unite Group PLC and Hansa Investment 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 Hansa Investment are associated (or correlated) with Unite Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unite Group PLC has no effect on the direction of Hansa Investment i.e., Hansa Investment and Unite Group go up and down completely randomly.
Pair Corralation between Hansa Investment and Unite Group
Assuming the 90 days trading horizon Hansa Investment is expected to generate 1.53 times more return on investment than Unite Group. However, Hansa Investment is 1.53 times more volatile than Unite Group PLC. It trades about 0.08 of its potential returns per unit of risk. Unite Group PLC is currently generating about -0.24 per unit of risk. If you would invest 22,099 in Hansa Investment on September 12, 2024 and sell it today you would earn a total of 1,701 from holding Hansa Investment or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Hansa Investment vs. Unite Group PLC
Performance |
| Timeline |
| Hansa Investment |
| Unite Group PLC |
Hansa Investment and Unite Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Investment and Unite Group
The main advantage of trading using opposite Hansa Investment and Unite Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Investment position performs unexpectedly, Unite Group 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 Unite Group will offset losses from the drop in Unite Group's long position.| Hansa Investment vs. CATCo Reinsurance Opportunities | Hansa Investment vs. BH Macro Limited | Hansa Investment vs. Legal General Group | Hansa Investment vs. TMT Investments PLC |
| Unite Group vs. Check Point Software | Unite Group vs. LBG Media PLC | Unite Group vs. Bell Food Group | Unite Group vs. Alfa Financial Software |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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