Correlation Between UniCredit SpA and Noble Financials
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and Noble Financials 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 Noble Financials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and Noble Financials SA, you can compare the effects of market volatilities on UniCredit SpA and Noble Financials 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 Noble Financials. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Noble Financials.
Diversification Opportunities for UniCredit SpA and Noble Financials
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between UniCredit and Noble is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and Noble Financials SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble Financials 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 Noble Financials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble Financials has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Noble Financials go up and down completely randomly.
Pair Corralation between UniCredit SpA and Noble Financials
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 0.4 times more return on investment than Noble Financials. However, UniCredit SpA is 2.52 times less risky than Noble Financials. It trades about 0.09 of its potential returns per unit of risk. Noble Financials SA is currently generating about 0.03 per unit of risk. If you would invest 12,430 in UniCredit SpA on August 27, 2024 and sell it today you would earn a total of 3,950 from holding UniCredit SpA or generate 31.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.68% |
| Values | Daily Returns |
UniCredit SpA vs. Noble Financials SA
Performance |
| Timeline |
| UniCredit SpA |
| Noble Financials |
UniCredit SpA and Noble Financials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Noble Financials
The main advantage of trading using opposite UniCredit SpA and Noble Financials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, Noble Financials 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 Noble Financials will offset losses from the drop in Noble Financials' long position.The idea behind UniCredit SpA and Noble Financials SA 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.| Noble Financials vs. Globe Trade Centre | Noble Financials vs. Asseco Business Solutions | Noble Financials vs. Detalion Games SA | Noble Financials vs. Asseco South Eastern |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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