Correlation Between Unipol Gruppo and American International

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Can any of the company-specific risk be diversified away by investing in both Unipol Gruppo and American International 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 American International 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 American International Group, you can compare the effects of market volatilities on Unipol Gruppo and American International 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 American International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unipol Gruppo and American International.

Diversification Opportunities for Unipol Gruppo and American International

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Unipol and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Unipol Gruppo SpA and American International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American International 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 American International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American International has no effect on the direction of Unipol Gruppo i.e., Unipol Gruppo and American International go up and down completely randomly.

Pair Corralation between Unipol Gruppo and American International

Assuming the 90 days horizon Unipol Gruppo SpA is expected to generate 3.51 times more return on investment than American International. However, Unipol Gruppo is 3.51 times more volatile than American International Group. It trades about 0.07 of its potential returns per unit of risk. American International Group is currently generating about 0.03 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 Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy59.6%
ValuesDaily Returns

Unipol Gruppo SpA  vs.  American International Group

 Performance 
       Timeline  
Unipol Gruppo SpA 

Risk-Adjusted Performance

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Over the last 90 days Unipol Gruppo SpA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Unipol Gruppo is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
American International 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days American International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, American International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Unipol Gruppo and American International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Unipol Gruppo and American International

The main advantage of trading using opposite Unipol Gruppo and American International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unipol Gruppo position performs unexpectedly, American International 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 American International will offset losses from the drop in American International's long position.
The idea behind Unipol Gruppo SpA and American International Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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