Correlation Between LSI Software and UniCredit SpA
Can any of the company-specific risk be diversified away by investing in both LSI Software 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 LSI Software and UniCredit SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LSI Software SA and UniCredit SpA, you can compare the effects of market volatilities on LSI Software 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 LSI Software with a short position of UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of LSI Software and UniCredit SpA.
Diversification Opportunities for LSI Software and UniCredit SpA
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LSI and UniCredit is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding LSI Software SA and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA and LSI Software 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 LSI Software SA 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 LSI Software i.e., LSI Software and UniCredit SpA go up and down completely randomly.
Pair Corralation between LSI Software and UniCredit SpA
Assuming the 90 days trading horizon LSI Software is expected to generate 3.26 times less return on investment than UniCredit SpA. But when comparing it to its historical volatility, LSI Software SA is 2.08 times less risky than UniCredit SpA. It trades about 0.05 of its potential returns per unit of risk. UniCredit SpA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,150 in UniCredit SpA on September 12, 2024 and sell it today you would earn a total of 10,400 from holding UniCredit SpA or generate 169.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.02% |
| Values | Daily Returns |
LSI Software SA vs. UniCredit SpA
Performance |
| Timeline |
| LSI Software SA |
| UniCredit SpA |
LSI Software and UniCredit SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LSI Software and UniCredit SpA
The main advantage of trading using opposite LSI Software and UniCredit SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LSI Software 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.| LSI Software vs. Skyline Investment SA | LSI Software vs. Immobile | LSI Software vs. Road Studio SA | LSI Software vs. MCI Management SA |
| UniCredit SpA vs. Santander Bank Polska | UniCredit SpA vs. Bank Polska Kasa | UniCredit SpA vs. ING Bank lski | UniCredit SpA vs. mBank 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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