Correlation Between Multi Units and HAN GINS
Can any of the company-specific risk be diversified away by investing in both Multi Units and HAN GINS 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 Multi Units and HAN GINS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Units Luxembourg and HAN GINS Indxx Healthcare, you can compare the effects of market volatilities on Multi Units and HAN GINS 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 Multi Units with a short position of HAN GINS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Units and HAN GINS.
Diversification Opportunities for Multi Units and HAN GINS
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Multi and HAN is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Multi Units Luxembourg and HAN GINS Indxx Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAN GINS Indxx and Multi Units 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 Multi Units Luxembourg are associated (or correlated) with HAN GINS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAN GINS Indxx has no effect on the direction of Multi Units i.e., Multi Units and HAN GINS go up and down completely randomly.
Pair Corralation between Multi Units and HAN GINS
Assuming the 90 days trading horizon Multi Units Luxembourg is expected to generate 1.06 times more return on investment than HAN GINS. However, Multi Units is 1.06 times more volatile than HAN GINS Indxx Healthcare. It trades about 0.12 of its potential returns per unit of risk. HAN GINS Indxx Healthcare is currently generating about 0.01 per unit of risk. If you would invest 5,196 in Multi Units Luxembourg on September 20, 2024 and sell it today you would earn a total of 723.00 from holding Multi Units Luxembourg or generate 13.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.22% |
Values | Daily Returns |
Multi Units Luxembourg vs. HAN GINS Indxx Healthcare
Performance |
Timeline |
Multi Units Luxembourg |
HAN GINS Indxx |
Multi Units and HAN GINS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Multi Units and HAN GINS
The main advantage of trading using opposite Multi Units and HAN GINS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Units position performs unexpectedly, HAN GINS 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 HAN GINS will offset losses from the drop in HAN GINS's long position.Multi Units vs. Lyxor UCITS Japan | Multi Units vs. Lyxor UCITS Japan | Multi Units vs. Lyxor UCITS Stoxx | Multi Units vs. Gold Bullion Securities |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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