Correlation Between UniCredit SpA and MCI Management
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and MCI Management 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 MCI Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and MCI Management SA, you can compare the effects of market volatilities on UniCredit SpA and MCI Management 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 MCI Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and MCI Management.
Diversification Opportunities for UniCredit SpA and MCI Management
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UniCredit and MCI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and MCI Management SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCI Management 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 MCI Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCI Management SA has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and MCI Management go up and down completely randomly.
Pair Corralation between UniCredit SpA and MCI Management
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 1.21 times more return on investment than MCI Management. However, UniCredit SpA is 1.21 times more volatile than MCI Management SA. It trades about 0.09 of its potential returns per unit of risk. MCI Management SA is currently generating about -0.01 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 Together |
| Strength | Very Weak |
| Accuracy | 95.68% |
| Values | Daily Returns |
UniCredit SpA vs. MCI Management SA
Performance |
| Timeline |
| UniCredit SpA |
| MCI Management SA |
UniCredit SpA and MCI Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and MCI Management
The main advantage of trading using opposite UniCredit SpA and MCI Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, MCI Management 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 MCI Management will offset losses from the drop in MCI Management's 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 |
| MCI Management vs. SOFTWARE MANSION SPOLKA | MCI Management vs. PMPG Polskie Media | MCI Management vs. Monnari Trade SA | MCI Management vs. PZ Cormay 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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