Correlation Between UniCredit SpA and Tauron Polska
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and Tauron Polska 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 Tauron Polska into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UniCredit SpA and Tauron Polska Energia, you can compare the effects of market volatilities on UniCredit SpA and Tauron Polska 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 Tauron Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Tauron Polska.
Diversification Opportunities for UniCredit SpA and Tauron Polska
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between UniCredit and Tauron is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and Tauron Polska Energia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tauron Polska Energia 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 Tauron Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tauron Polska Energia has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Tauron Polska go up and down completely randomly.
Pair Corralation between UniCredit SpA and Tauron Polska
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 1.24 times more return on investment than Tauron Polska. However, UniCredit SpA is 1.24 times more volatile than Tauron Polska Energia. It trades about 0.48 of its potential returns per unit of risk. Tauron Polska Energia is currently generating about 0.36 per unit of risk. If you would invest 16,100 in UniCredit SpA on October 24, 2024 and sell it today you would earn a total of 2,116 from holding UniCredit SpA or generate 13.14% 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. Tauron Polska Energia
Performance |
| Timeline |
| UniCredit SpA |
| Tauron Polska Energia |
UniCredit SpA and Tauron Polska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and Tauron Polska
The main advantage of trading using opposite UniCredit SpA and Tauron Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, Tauron Polska 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 Tauron Polska will offset losses from the drop in Tauron Polska's long position.| UniCredit SpA vs. New Tech Venture | UniCredit SpA vs. TEN SQUARE GAMES | UniCredit SpA vs. CI Games SA | UniCredit SpA vs. Medicofarma Biotech SA |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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