Correlation Between UniCredit SpA and Neuca SA
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and Neuca 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 Neuca 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 Neuca SA, you can compare the effects of market volatilities on UniCredit SpA and Neuca 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 Neuca SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Neuca SA.
Diversification Opportunities for UniCredit SpA and Neuca SA
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between UniCredit and Neuca is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and Neuca SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neuca 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 Neuca SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neuca SA has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Neuca SA go up and down completely randomly.
Pair Corralation between UniCredit SpA and Neuca SA
Assuming the 90 days trading horizon UniCredit SpA is expected to under-perform the Neuca SA. In addition to that, UniCredit SpA is 1.83 times more volatile than Neuca SA. It trades about -0.24 of its total potential returns per unit of risk. Neuca SA is currently generating about -0.21 per unit of volatility. If you would invest 80,600 in Neuca SA on September 1, 2024 and sell it today you would lose (4,600) from holding Neuca SA or give up 5.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.47% |
| Values | Daily Returns |
UniCredit SpA vs. Neuca SA
Performance |
| Timeline |
| UniCredit SpA |
| Neuca SA |
UniCredit SpA and Neuca SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Neuca SA
The main advantage of trading using opposite UniCredit SpA and Neuca SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, Neuca 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 Neuca SA will offset losses from the drop in Neuca SA's long position.| UniCredit SpA vs. 3R Games SA | UniCredit SpA vs. CI Games SA | UniCredit SpA vs. Carlson Investments SA | UniCredit SpA vs. Echo Investment SA |
| Neuca SA vs. Banco Santander SA | Neuca SA vs. UniCredit SpA | Neuca SA vs. CEZ as | Neuca SA vs. Polski Koncern Naftowy |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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