Correlation Between QURATE RETAIL and UNITED UTILITIES
Can any of the company-specific risk be diversified away by investing in both QURATE RETAIL and UNITED UTILITIES 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 QURATE RETAIL and UNITED UTILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QURATE RETAIL INC and UNITED UTILITIES GR, you can compare the effects of market volatilities on QURATE RETAIL and UNITED UTILITIES 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 QURATE RETAIL with a short position of UNITED UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of QURATE RETAIL and UNITED UTILITIES.
Diversification Opportunities for QURATE RETAIL and UNITED UTILITIES
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between QURATE and UNITED is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding QURATE RETAIL INC and UNITED UTILITIES GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED UTILITIES and QURATE RETAIL 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 QURATE RETAIL INC are associated (or correlated) with UNITED UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED UTILITIES has no effect on the direction of QURATE RETAIL i.e., QURATE RETAIL and UNITED UTILITIES go up and down completely randomly.
Pair Corralation between QURATE RETAIL and UNITED UTILITIES
Assuming the 90 days trading horizon QURATE RETAIL INC is expected to under-perform the UNITED UTILITIES. In addition to that, QURATE RETAIL is 3.44 times more volatile than UNITED UTILITIES GR. It trades about -0.03 of its total potential returns per unit of risk. UNITED UTILITIES GR is currently generating about 0.03 per unit of volatility. If you would invest 1,156 in UNITED UTILITIES GR on September 14, 2024 and sell it today you would earn a total of 134.00 from holding UNITED UTILITIES GR or generate 11.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QURATE RETAIL INC vs. UNITED UTILITIES GR
Performance |
| Timeline |
| QURATE RETAIL INC |
| UNITED UTILITIES |
QURATE RETAIL and UNITED UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QURATE RETAIL and UNITED UTILITIES
The main advantage of trading using opposite QURATE RETAIL and UNITED UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QURATE RETAIL position performs unexpectedly, UNITED UTILITIES 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 UTILITIES will offset losses from the drop in UNITED UTILITIES's long position.| QURATE RETAIL vs. Tencent Holdings | QURATE RETAIL vs. Baidu Inc | QURATE RETAIL vs. Alibaba Group Holdings | QURATE RETAIL vs. BYD Company Limited |
| UNITED UTILITIES vs. National Retail Properties | UNITED UTILITIES vs. QURATE RETAIL INC | UNITED UTILITIES vs. Sumitomo Rubber Industries | UNITED UTILITIES vs. GOODYEAR T RUBBER |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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