Correlation Between UniCredit SpA and GreenX Metals

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and GreenX Metals 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 GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and GreenX Metals, you can compare the effects of market volatilities on UniCredit SpA and GreenX Metals 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and GreenX Metals.

Diversification Opportunities for UniCredit SpA and GreenX Metals

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between UniCredit and GreenX is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals 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 GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and GreenX Metals go up and down completely randomly.

Pair Corralation between UniCredit SpA and GreenX Metals

Assuming the 90 days trading horizon UniCredit SpA is expected to generate 0.8 times more return on investment than GreenX Metals. However, UniCredit SpA is 1.24 times less risky than GreenX Metals. It trades about -0.1 of its potential returns per unit of risk. GreenX Metals is currently generating about -0.21 per unit of risk. If you would invest  17,134  in UniCredit SpA on August 27, 2024 and sell it today you would lose (754.00) from holding UniCredit SpA or give up 4.4% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy84.21%
ValuesDaily Returns

UniCredit SpA  vs.  GreenX Metals

 Performance 
       Timeline  
UniCredit SpA 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in UniCredit SpA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, UniCredit SpA may actually be approaching a critical reversion point that can send shares even higher in December 2024.
GreenX Metals 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GreenX Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, GreenX Metals is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

UniCredit SpA and GreenX Metals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with UniCredit SpA and GreenX Metals

The main advantage of trading using opposite UniCredit SpA and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.
The idea behind UniCredit SpA and GreenX Metals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

Other Complementary Tools

AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Transaction History
View history of all your transactions and understand their impact on performance
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Stocks Directory
Find actively traded stocks across global markets
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance