Correlation Between UIE PLC and Alefarm Brewing
Can any of the company-specific risk be diversified away by investing in both UIE PLC and Alefarm Brewing 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 UIE PLC and Alefarm Brewing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UIE PLC and Alefarm Brewing AS, you can compare the effects of market volatilities on UIE PLC and Alefarm Brewing 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 UIE PLC with a short position of Alefarm Brewing. Check out your portfolio center. Please also check ongoing floating volatility patterns of UIE PLC and Alefarm Brewing.
Diversification Opportunities for UIE PLC and Alefarm Brewing
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UIE and Alefarm is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding UIE PLC and Alefarm Brewing AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alefarm Brewing AS and UIE PLC 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 UIE PLC are associated (or correlated) with Alefarm Brewing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alefarm Brewing AS has no effect on the direction of UIE PLC i.e., UIE PLC and Alefarm Brewing go up and down completely randomly.
Pair Corralation between UIE PLC and Alefarm Brewing
Assuming the 90 days trading horizon UIE PLC is expected to generate 0.43 times more return on investment than Alefarm Brewing. However, UIE PLC is 2.33 times less risky than Alefarm Brewing. It trades about 0.1 of its potential returns per unit of risk. Alefarm Brewing AS is currently generating about -0.04 per unit of risk. If you would invest 28,200 in UIE PLC on October 25, 2024 and sell it today you would earn a total of 2,700 from holding UIE PLC or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UIE PLC vs. Alefarm Brewing AS
Performance |
| Timeline |
| UIE PLC |
| Alefarm Brewing AS |
UIE PLC and Alefarm Brewing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UIE PLC and Alefarm Brewing
The main advantage of trading using opposite UIE PLC and Alefarm Brewing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UIE PLC position performs unexpectedly, Alefarm Brewing 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 Alefarm Brewing will offset losses from the drop in Alefarm Brewing's long position.| UIE PLC vs. Per Aarsleff Holding | UIE PLC vs. Schouw Co | UIE PLC vs. Ringkjoebing Landbobank AS | UIE PLC vs. Jeudan |
| Alefarm Brewing vs. Sparinvest INDEX Globale | Alefarm Brewing vs. Bavarian Nordic | Alefarm Brewing vs. Nordea Invest Global | Alefarm Brewing vs. Investeringsselskabet Luxor AS |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |