Correlation Between UniCredit SpA and Budimex SA
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and Budimex SA 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 Budimex SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and Budimex SA, you can compare the effects of market volatilities on UniCredit SpA and Budimex 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 UniCredit SpA with a short position of Budimex SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Budimex SA.
Diversification Opportunities for UniCredit SpA and Budimex SA
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UniCredit and Budimex is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and Budimex SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Budimex 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 Budimex SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Budimex SA has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Budimex SA go up and down completely randomly.
Pair Corralation between UniCredit SpA and Budimex SA
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 1.08 times more return on investment than Budimex SA. However, UniCredit SpA is 1.08 times more volatile than Budimex SA. It trades about 0.01 of its potential returns per unit of risk. Budimex SA is currently generating about -0.16 per unit of risk. If you would invest 15,510 in UniCredit SpA on August 30, 2024 and sell it today you would earn a total of 32.00 from holding UniCredit SpA or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
UniCredit SpA vs. Budimex SA
Performance |
| Timeline |
| UniCredit SpA |
| Budimex SA |
UniCredit SpA and Budimex SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Budimex SA
The main advantage of trading using opposite UniCredit SpA and Budimex SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, Budimex 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 Budimex SA will offset losses from the drop in Budimex SA's long position.| UniCredit SpA vs. Santander Bank Polska | UniCredit SpA vs. Bank Polska Kasa | UniCredit SpA vs. Bank Handlowy w | UniCredit SpA vs. BNP Paribas Bank |
| Budimex SA vs. Banco Santander SA | Budimex SA vs. UniCredit SpA | Budimex SA vs. CEZ as | Budimex SA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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