Correlation Between UniCredit SpA and VOOLT SA
Can any of the company-specific risk be diversified away by investing in both UniCredit SpA and VOOLT 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 VOOLT 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 VOOLT SA, you can compare the effects of market volatilities on UniCredit SpA and VOOLT 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 VOOLT SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and VOOLT SA.
Diversification Opportunities for UniCredit SpA and VOOLT SA
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UniCredit and VOOLT is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and VOOLT SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VOOLT 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 VOOLT SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VOOLT SA has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and VOOLT SA go up and down completely randomly.
Pair Corralation between UniCredit SpA and VOOLT SA
Assuming the 90 days trading horizon UniCredit SpA is expected to generate 1.04 times more return on investment than VOOLT SA. However, UniCredit SpA is 1.04 times more volatile than VOOLT SA. It trades about 0.25 of its potential returns per unit of risk. VOOLT SA is currently generating about 0.06 per unit of risk. If you would invest 18,346 in UniCredit SpA on November 28, 2024 and sell it today you would earn a total of 1,634 from holding UniCredit SpA or generate 8.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
UniCredit SpA vs. VOOLT SA
Performance |
| Timeline |
| UniCredit SpA |
| VOOLT SA |
UniCredit SpA and VOOLT SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UniCredit SpA and VOOLT SA
The main advantage of trading using opposite UniCredit SpA and VOOLT SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UniCredit SpA position performs unexpectedly, VOOLT 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 VOOLT SA will offset losses from the drop in VOOLT SA's long position.| UniCredit SpA vs. Monnari Trade SA | UniCredit SpA vs. Creativeforge Games SA | UniCredit SpA vs. CI Games SA | UniCredit SpA vs. Skyline Investment 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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