Correlation Between UniCredit SpA and Balticon
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and Balticon 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 Balticon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and Balticon, you can compare the effects of market volatilities on UniCredit SpA and Balticon 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 Balticon. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Balticon.
Diversification Opportunities for UniCredit SpA and Balticon
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UniCredit and Balticon is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and Balticon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balticon 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 Balticon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balticon has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Balticon go up and down completely randomly.
Pair Corralation between UniCredit SpA and Balticon
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 1.18 times more return on investment than Balticon. However, UniCredit SpA is 1.18 times more volatile than Balticon. It trades about 0.07 of its potential returns per unit of risk. Balticon is currently generating about 0.03 per unit of risk. If you would invest 5,900 in UniCredit SpA on August 30, 2024 and sell it today you would earn a total of 9,526 from holding UniCredit SpA or generate 161.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
UniCredit SpA vs. Balticon
Performance |
| Timeline |
| UniCredit SpA |
| Balticon |
UniCredit SpA and Balticon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Balticon
The main advantage of trading using opposite UniCredit SpA and Balticon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, Balticon 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 Balticon will offset losses from the drop in Balticon's long position.| UniCredit SpA vs. 3R Games SA | UniCredit SpA vs. Enter Air SA | UniCredit SpA vs. Mercator Medical SA | UniCredit SpA vs. Baked Games SA |
| Balticon vs. LSI Software SA | Balticon vs. Road Studio SA | Balticon vs. SOFTWARE MANSION SPOLKA | Balticon vs. Enter Air SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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