Correlation Between UniCredit SpA and Brand 24
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and Brand 24 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 UniCredit SpA and Brand 24 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and Brand 24 SA, you can compare the effects of market volatilities on UniCredit SpA and Brand 24 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 UniCredit SpA with a short position of Brand 24. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Brand 24.
Diversification Opportunities for UniCredit SpA and Brand 24
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UniCredit and Brand is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and Brand 24 SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brand 24 SA and UniCredit SpA 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 UniCredit SpA are associated (or correlated) with Brand 24. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brand 24 SA has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Brand 24 go up and down completely randomly.
Pair Corralation between UniCredit SpA and Brand 24
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 1.29 times less return on investment than Brand 24. In addition to that, UniCredit SpA is 2.57 times more volatile than Brand 24 SA. It trades about 0.01 of its total potential returns per unit of risk. Brand 24 SA is currently generating about 0.04 per unit of volatility. If you would invest 4,530 in Brand 24 SA on September 1, 2024 and sell it today you would earn a total of 170.00 from holding Brand 24 SA or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
UniCredit SpA vs. Brand 24 SA
Performance |
| Timeline |
| UniCredit SpA |
| Brand 24 SA |
UniCredit SpA and Brand 24 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Brand 24
The main advantage of trading using opposite UniCredit SpA and Brand 24 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, Brand 24 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 Brand 24 will offset losses from the drop in Brand 24's long position.| UniCredit SpA vs. 3R Games SA | UniCredit SpA vs. CI Games SA | UniCredit SpA vs. Carlson Investments SA | UniCredit SpA vs. Echo Investment SA |
| Brand 24 vs. Banco Santander SA | Brand 24 vs. UniCredit SpA | Brand 24 vs. CEZ as | Brand 24 vs. Polski Koncern Naftowy |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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