Correlation Between UCB SA and Etex SA
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By analyzing existing cross correlation between UCB SA and Etex SA, you can compare the effects of market volatilities on UCB SA and Etex SA 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 UCB SA with a short position of Etex SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UCB SA and Etex SA.
Diversification Opportunities for UCB SA and Etex SA
Excellent diversification
The 3 months correlation between UCB and Etex is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding UCB SA and Etex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etex SA and UCB 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 UCB SA are associated (or correlated) with Etex SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etex SA has no effect on the direction of UCB SA i.e., UCB SA and Etex SA go up and down completely randomly.
Pair Corralation between UCB SA and Etex SA
Assuming the 90 days trading horizon UCB SA is expected to generate 0.87 times more return on investment than Etex SA. However, UCB SA is 1.15 times less risky than Etex SA. It trades about 0.18 of its potential returns per unit of risk. Etex SA is currently generating about -0.15 per unit of risk. If you would invest 16,200 in UCB SA on August 30, 2024 and sell it today you would earn a total of 2,285 from holding UCB SA or generate 14.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 22.73% |
| Values | Daily Returns |
UCB SA vs. Etex SA
Performance |
| Timeline |
| UCB SA |
| Etex SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
UCB SA and Etex SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UCB SA and Etex SA
The main advantage of trading using opposite UCB SA and Etex SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UCB SA position performs unexpectedly, Etex SA 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 Etex SA will offset losses from the drop in Etex SA's long position.The idea behind UCB SA and Etex SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Etex SA vs. Shurgard Self Storage | Etex SA vs. Ion Beam Applications | Etex SA vs. Keyware Technologies NV | Etex SA vs. Retail Estates |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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