Correlation Between Litigation Capital and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Litigation Capital and Uniper SE 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 Litigation Capital and Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litigation Capital Management and Uniper SE, you can compare the effects of market volatilities on Litigation Capital and Uniper SE 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 Litigation Capital with a short position of Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and Uniper SE.
Diversification Opportunities for Litigation Capital and Uniper SE
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Litigation and Uniper is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and Litigation Capital 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 Litigation Capital Management are associated (or correlated) with Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Litigation Capital i.e., Litigation Capital and Uniper SE go up and down completely randomly.
Pair Corralation between Litigation Capital and Uniper SE
Assuming the 90 days trading horizon Litigation Capital Management is expected to under-perform the Uniper SE. But the stock apears to be less risky and, when comparing its historical volatility, Litigation Capital Management is 1.14 times less risky than Uniper SE. The stock trades about -0.22 of its potential returns per unit of risk. The Uniper SE is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 4,302 in Uniper SE on September 13, 2024 and sell it today you would lose (139.00) from holding Uniper SE or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Litigation Capital Management vs. Uniper SE
Performance |
| Timeline |
| Litigation Capital |
| Uniper SE |
Litigation Capital and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and Uniper SE
The main advantage of trading using opposite Litigation Capital and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation Capital position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.| Litigation Capital vs. Intuitive Investments Group | Litigation Capital vs. Universal Display Corp | Litigation Capital vs. Batm Advanced Communications | Litigation Capital vs. Arrow Electronics |
| Uniper SE vs. Applied Materials | Uniper SE vs. Datagroup SE | Uniper SE vs. Vulcan Materials Co | Uniper SE vs. CleanTech Lithium plc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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