Correlation Between Unipol Gruppo and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both Unipol Gruppo and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unipol Gruppo Finanziario and IMPERIAL TOBACCO , you can compare the effects of market volatilities on Unipol Gruppo and IMPERIAL TOBACCO 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 IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unipol Gruppo and IMPERIAL TOBACCO.
Diversification Opportunities for Unipol Gruppo and IMPERIAL TOBACCO
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Unipol and IMPERIAL is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Unipol Gruppo Finanziario and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO 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 Finanziario are associated (or correlated) with IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of Unipol Gruppo i.e., Unipol Gruppo and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between Unipol Gruppo and IMPERIAL TOBACCO
Assuming the 90 days trading horizon Unipol Gruppo Finanziario is expected to generate 1.64 times more return on investment than IMPERIAL TOBACCO. However, Unipol Gruppo is 1.64 times more volatile than IMPERIAL TOBACCO . It trades about 0.12 of its potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.08 per unit of risk. If you would invest 432.00 in Unipol Gruppo Finanziario on October 11, 2024 and sell it today you would earn a total of 728.00 from holding Unipol Gruppo Finanziario or generate 168.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unipol Gruppo Finanziario vs. IMPERIAL TOBACCO
Performance |
| Timeline |
| Unipol Gruppo Finanziario |
| IMPERIAL TOBACCO |
Unipol Gruppo and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unipol Gruppo and IMPERIAL TOBACCO
The main advantage of trading using opposite Unipol Gruppo and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unipol Gruppo position performs unexpectedly, IMPERIAL TOBACCO 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| Unipol Gruppo vs. RYANAIR HLDGS ADR | Unipol Gruppo vs. Alaska Air Group | Unipol Gruppo vs. COLUMBIA SPORTSWEAR | Unipol Gruppo vs. SYSTEMAIR AB |
| IMPERIAL TOBACCO vs. Take Two Interactive Software | IMPERIAL TOBACCO vs. Taylor Morrison Home | IMPERIAL TOBACCO vs. Alfa Financial Software | IMPERIAL TOBACCO vs. Neinor Homes SA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |