Correlation Between UniCredit SpA and Enea SA
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and Enea 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 Enea 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 Enea SA, you can compare the effects of market volatilities on UniCredit SpA and Enea 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 Enea SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Enea SA.
Diversification Opportunities for UniCredit SpA and Enea SA
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UniCredit and Enea is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and Enea SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enea 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 Enea SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enea SA has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Enea SA go up and down completely randomly.
Pair Corralation between UniCredit SpA and Enea SA
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 0.9 times more return on investment than Enea SA. However, UniCredit SpA is 1.11 times less risky than Enea SA. It trades about 0.5 of its potential returns per unit of risk. Enea SA is currently generating about 0.22 per unit of risk. If you would invest 16,120 in UniCredit SpA on November 3, 2024 and sell it today you would earn a total of 2,628 from holding UniCredit SpA or generate 16.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UniCredit SpA vs. Enea SA
Performance |
| Timeline |
| UniCredit SpA |
| Enea SA |
UniCredit SpA and Enea SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Enea SA
The main advantage of trading using opposite UniCredit SpA and Enea SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, Enea 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 Enea SA will offset losses from the drop in Enea SA's long position.| UniCredit SpA vs. Santander Bank Polska | UniCredit SpA vs. Bank Polska Kasa | UniCredit SpA vs. ING Bank lski | UniCredit SpA vs. mBank SA |
| Enea SA vs. Creativeforge Games SA | Enea SA vs. Ultimate Games SA | Enea SA vs. Investment Friends Capital | Enea SA vs. LSI Software 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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