Correlation Between One World and Bunzl Plc
Can any of the company-specific risk be diversified away by investing in both One World and Bunzl Plc 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 One World and Bunzl Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One World Universe and Bunzl plc, you can compare the effects of market volatilities on One World and Bunzl Plc 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 One World with a short position of Bunzl Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of One World and Bunzl Plc.
Diversification Opportunities for One World and Bunzl Plc
Very good diversification
The 3 months correlation between One and Bunzl is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding One World Universe and Bunzl plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bunzl plc and One World 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 One World Universe are associated (or correlated) with Bunzl Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bunzl plc has no effect on the direction of One World i.e., One World and Bunzl Plc go up and down completely randomly.
Pair Corralation between One World and Bunzl Plc
Given the investment horizon of 90 days One World Universe is expected to generate 10.04 times more return on investment than Bunzl Plc. However, One World is 10.04 times more volatile than Bunzl plc. It trades about 0.03 of its potential returns per unit of risk. Bunzl plc is currently generating about 0.05 per unit of risk. If you would invest 2.50 in One World Universe on September 3, 2024 and sell it today you would lose (1.77) from holding One World Universe or give up 70.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
One World Universe vs. Bunzl plc
Performance |
| Timeline |
| One World Universe |
| Bunzl plc |
One World and Bunzl Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One World and Bunzl Plc
The main advantage of trading using opposite One World and Bunzl Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One World position performs unexpectedly, Bunzl Plc 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 Bunzl Plc will offset losses from the drop in Bunzl Plc's long position.| One World vs. TonnerOne World Holdings | One World vs. JPX Global | One World vs. All American Pet | One World vs. RCABS Inc |
| Bunzl Plc vs. TOMI Environmental Solutions | Bunzl Plc vs. SCOR PK | Bunzl Plc vs. HUMANA INC | Bunzl Plc vs. Aquagold International |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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