Correlation Between Neuca SA and UniCredit SpA
Can any of the company-specific risk be diversified away by investing in both Neuca SA 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 Neuca SA and UniCredit SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neuca SA and UniCredit SpA, you can compare the effects of market volatilities on Neuca SA 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 Neuca SA with a short position of UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neuca SA and UniCredit SpA.
Diversification Opportunities for Neuca SA and UniCredit SpA
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Neuca and UniCredit is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Neuca SA and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA and Neuca SA 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 Neuca 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 Neuca SA i.e., Neuca SA and UniCredit SpA go up and down completely randomly.
Pair Corralation between Neuca SA and UniCredit SpA
Assuming the 90 days trading horizon Neuca SA is expected to generate 0.64 times more return on investment than UniCredit SpA. However, Neuca SA is 1.57 times less risky than UniCredit SpA. It trades about -0.09 of its potential returns per unit of risk. UniCredit SpA is currently generating about -0.32 per unit of risk. If you would invest 80,200 in Neuca SA on September 4, 2024 and sell it today you would lose (2,200) from holding Neuca SA or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Neuca SA vs. UniCredit SpA
Performance |
| Timeline |
| Neuca SA |
| UniCredit SpA |
Neuca SA and UniCredit SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neuca SA and UniCredit SpA
The main advantage of trading using opposite Neuca SA and UniCredit SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neuca SA 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.| Neuca SA vs. Immobile | Neuca SA vs. Intersport Polska SA | Neuca SA vs. Play2Chill SA | Neuca SA vs. GreenX Metals |
| UniCredit SpA vs. Carlson Investments SA | UniCredit SpA vs. Drago entertainment SA | UniCredit SpA vs. MCI Management SA | UniCredit SpA vs. Baked Games 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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