Correlation Between UniCredit SpA and MLP Group
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and MLP Group 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 MLP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and MLP Group SA, you can compare the effects of market volatilities on UniCredit SpA and MLP Group 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 MLP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and MLP Group.
Diversification Opportunities for UniCredit SpA and MLP Group
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between UniCredit and MLP is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and MLP Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MLP Group 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 MLP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MLP Group SA has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and MLP Group go up and down completely randomly.
Pair Corralation between UniCredit SpA and MLP Group
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 0.8 times more return on investment than MLP Group. However, UniCredit SpA is 1.24 times less risky than MLP Group. It trades about 0.5 of its potential returns per unit of risk. MLP Group SA is currently generating about 0.12 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UniCredit SpA vs. MLP Group SA
Performance |
| Timeline |
| UniCredit SpA |
| MLP Group SA |
UniCredit SpA and MLP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and MLP Group
The main advantage of trading using opposite UniCredit SpA and MLP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, MLP Group 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 MLP Group will offset losses from the drop in MLP Group'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 |
| MLP Group vs. Santander Bank Polska | MLP Group vs. Bank Millennium SA | MLP Group vs. Skyline Investment SA | MLP Group vs. Echo Investment 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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