Correlation Between UniCredit SpA and Dow Jones
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and Dow Jones Industrial, you can compare the effects of market volatilities on UniCredit SpA and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Dow Jones.
Diversification Opportunities for UniCredit SpA and Dow Jones
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UniCredit and Dow is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Dow Jones go up and down completely randomly.
Pair Corralation between UniCredit SpA and Dow Jones
Assuming the 90 days trading horizon UniCredit SpA is expected to under-perform the Dow Jones. In addition to that, UniCredit SpA is 2.75 times more volatile than Dow Jones Industrial. It trades about -0.21 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.22 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 190,894 from holding Dow Jones Industrial or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 76.19% |
| Values | Daily Returns |
UniCredit SpA vs. Dow Jones Industrial
Performance |
| Timeline |
UniCredit SpA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
UniCredit SpA
Pair trading matchups for UniCredit SpA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with UniCredit SpA and Dow Jones
The main advantage of trading using opposite UniCredit SpA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| UniCredit SpA vs. SOFTWARE MANSION SPOLKA | UniCredit SpA vs. Skyline Investment SA | UniCredit SpA vs. Quantum Software SA | UniCredit SpA vs. PZ Cormay SA |
| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| CEOs Directory Screen CEOs from public companies around the world |