Correlation Between UF Games and Bank Millennium
Can any of the company-specific risk be diversified away by investing in both UF Games and Bank Millennium 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 UF Games and Bank Millennium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UF Games SA and Bank Millennium SA, you can compare the effects of market volatilities on UF Games and Bank Millennium 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 UF Games with a short position of Bank Millennium. Check out your portfolio center. Please also check ongoing floating volatility patterns of UF Games and Bank Millennium.
Diversification Opportunities for UF Games and Bank Millennium
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UFG and Bank is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding UF Games SA and Bank Millennium SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Millennium SA and UF Games 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 UF Games SA are associated (or correlated) with Bank Millennium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Millennium SA has no effect on the direction of UF Games i.e., UF Games and Bank Millennium go up and down completely randomly.
Pair Corralation between UF Games and Bank Millennium
Assuming the 90 days trading horizon UF Games SA is expected to under-perform the Bank Millennium. In addition to that, UF Games is 1.17 times more volatile than Bank Millennium SA. It trades about -0.09 of its total potential returns per unit of risk. Bank Millennium SA is currently generating about 0.06 per unit of volatility. If you would invest 459.00 in Bank Millennium SA on August 28, 2024 and sell it today you would earn a total of 364.00 from holding Bank Millennium SA or generate 79.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.17% |
| Values | Daily Returns |
UF Games SA vs. Bank Millennium SA
Performance |
| Timeline |
| UF Games SA |
| Bank Millennium SA |
UF Games and Bank Millennium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UF Games and Bank Millennium
The main advantage of trading using opposite UF Games and Bank Millennium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UF Games position performs unexpectedly, Bank Millennium 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 Bank Millennium will offset losses from the drop in Bank Millennium's long position.| UF Games vs. Banco Santander SA | UF Games vs. UniCredit SpA | UF Games vs. CEZ as | UF Games 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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