Correlation Between UIE PLC and SP Group
Can any of the company-specific risk be diversified away by investing in both UIE PLC and SP Group 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 SP Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UIE PLC and SP Group AS, you can compare the effects of market volatilities on UIE PLC and SP Group 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 SP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of UIE PLC and SP Group.
Diversification Opportunities for UIE PLC and SP Group
Good diversification
The 3 months correlation between UIE and SPG is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding UIE PLC and SP Group AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Group 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 SP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Group AS has no effect on the direction of UIE PLC i.e., UIE PLC and SP Group go up and down completely randomly.
Pair Corralation between UIE PLC and SP Group
Assuming the 90 days trading horizon UIE PLC is expected to generate 0.68 times more return on investment than SP Group. However, UIE PLC is 1.47 times less risky than SP Group. It trades about 0.08 of its potential returns per unit of risk. SP Group AS is currently generating about 0.03 per unit of risk. If you would invest 18,793 in UIE PLC on November 5, 2024 and sell it today you would earn a total of 12,407 from holding UIE PLC or generate 66.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UIE PLC vs. SP Group AS
Performance |
| Timeline |
| UIE PLC |
| SP Group AS |
UIE PLC and SP Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UIE PLC and SP Group
The main advantage of trading using opposite UIE PLC and SP Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UIE PLC position performs unexpectedly, SP Group 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 SP Group will offset losses from the drop in SP Group's long position.| UIE PLC vs. Per Aarsleff Holding | UIE PLC vs. Schouw Co | UIE PLC vs. Ringkjoebing Landbobank AS | UIE PLC vs. Jeudan |
| SP Group vs. Schouw Co | SP Group vs. Per Aarsleff Holding | SP Group vs. HH International AS | SP Group vs. DFDS 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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