Correlation Between Unipol Gruppo and Arch Capital
Can any of the company-specific risk be diversified away by investing in both Unipol Gruppo and Arch Capital 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 Unipol Gruppo and Arch Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unipol Gruppo SpA and Arch Capital Group, you can compare the effects of market volatilities on Unipol Gruppo and Arch Capital 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 Unipol Gruppo with a short position of Arch Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unipol Gruppo and Arch Capital.
Diversification Opportunities for Unipol Gruppo and Arch Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Unipol and Arch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Unipol Gruppo SpA and Arch Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arch Capital Group and Unipol Gruppo 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 Unipol Gruppo SpA are associated (or correlated) with Arch Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arch Capital Group has no effect on the direction of Unipol Gruppo i.e., Unipol Gruppo and Arch Capital go up and down completely randomly.
Pair Corralation between Unipol Gruppo and Arch Capital
Assuming the 90 days horizon Unipol Gruppo SpA is expected to generate 3.41 times more return on investment than Arch Capital. However, Unipol Gruppo is 3.41 times more volatile than Arch Capital Group. It trades about 0.07 of its potential returns per unit of risk. Arch Capital Group is currently generating about 0.06 per unit of risk. If you would invest 202.00 in Unipol Gruppo SpA on September 20, 2024 and sell it today you would earn a total of 271.00 from holding Unipol Gruppo SpA or generate 134.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 59.6% |
| Values | Daily Returns |
Unipol Gruppo SpA vs. Arch Capital Group
Performance |
| Timeline |
| Unipol Gruppo SpA |
| Arch Capital Group |
Unipol Gruppo and Arch Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unipol Gruppo and Arch Capital
The main advantage of trading using opposite Unipol Gruppo and Arch Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unipol Gruppo position performs unexpectedly, Arch Capital 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 Arch Capital will offset losses from the drop in Arch Capital's long position.| Unipol Gruppo vs. Athene Holding | Unipol Gruppo vs. Assicurazioni Generali SpA | Unipol Gruppo vs. AXA SA | Unipol Gruppo vs. Assicurazioni Generali SpA |
| Arch Capital vs. Enstar Group Limited | Arch Capital vs. Aegon NV ADR | Arch Capital vs. American International Group | Arch Capital vs. Axa Equitable Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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