Correlation Between UF Games and Shoper SA
Can any of the company-specific risk be diversified away by investing in both UF Games and Shoper 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 UF Games and Shoper SA 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 Shoper SA, you can compare the effects of market volatilities on UF Games and Shoper 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 UF Games with a short position of Shoper SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UF Games and Shoper SA.
Diversification Opportunities for UF Games and Shoper SA
Poor diversification
The 3 months correlation between UFG and Shoper is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding UF Games SA and Shoper SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoper 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 Shoper SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoper SA has no effect on the direction of UF Games i.e., UF Games and Shoper SA go up and down completely randomly.
Pair Corralation between UF Games and Shoper SA
Assuming the 90 days trading horizon UF Games SA is expected to under-perform the Shoper SA. In addition to that, UF Games is 1.18 times more volatile than Shoper SA. It trades about -0.09 of its total potential returns per unit of risk. Shoper SA is currently generating about 0.05 per unit of volatility. If you would invest 2,671 in Shoper SA on September 5, 2024 and sell it today you would earn a total of 1,379 from holding Shoper SA or generate 51.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.73% |
| Values | Daily Returns |
UF Games SA vs. Shoper SA
Performance |
| Timeline |
| UF Games SA |
| Shoper SA |
UF Games and Shoper SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UF Games and Shoper SA
The main advantage of trading using opposite UF Games and Shoper SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UF Games position performs unexpectedly, Shoper 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 Shoper SA will offset losses from the drop in Shoper SA'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 |
| Shoper SA vs. Marie Brizard Wine | Shoper SA vs. UF Games SA | Shoper SA vs. Centrum Finansowe Banku | Shoper SA vs. ING Bank lski |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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