Correlation Between U Blox and Belimo Holding
Can any of the company-specific risk be diversified away by investing in both U Blox and Belimo Holding 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 U Blox and Belimo Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Blox Holding and Belimo Holding, you can compare the effects of market volatilities on U Blox and Belimo Holding 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 U Blox with a short position of Belimo Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Blox and Belimo Holding.
Diversification Opportunities for U Blox and Belimo Holding
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UBXN and Belimo is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding U Blox Holding and Belimo Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belimo Holding and U Blox 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 U Blox Holding are associated (or correlated) with Belimo Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belimo Holding has no effect on the direction of U Blox i.e., U Blox and Belimo Holding go up and down completely randomly.
Pair Corralation between U Blox and Belimo Holding
Assuming the 90 days trading horizon U Blox Holding is expected to under-perform the Belimo Holding. In addition to that, U Blox is 1.18 times more volatile than Belimo Holding. It trades about -0.04 of its total potential returns per unit of risk. Belimo Holding is currently generating about 0.09 per unit of volatility. If you would invest 42,231 in Belimo Holding on September 2, 2024 and sell it today you would earn a total of 16,719 from holding Belimo Holding or generate 39.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Blox Holding vs. Belimo Holding
Performance |
| Timeline |
| U Blox Holding |
| Belimo Holding |
U Blox and Belimo Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Blox and Belimo Holding
The main advantage of trading using opposite U Blox and Belimo Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Blox position performs unexpectedly, Belimo Holding 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 Belimo Holding will offset losses from the drop in Belimo Holding's long position.| U Blox vs. Jungfraubahn Holding AG | U Blox vs. Amsterdam Commodities NV | U Blox vs. Flow Traders BV | U Blox vs. ForFarmers NV |
| Belimo Holding vs. EMS CHEMIE HOLDING AG | Belimo Holding vs. Geberit AG | Belimo Holding vs. VAT Group AG | Belimo Holding vs. Interroll Holding AG |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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