Correlation Between Unilever PLC and Telekom Austria
Can any of the company-specific risk be diversified away by investing in both Unilever PLC and Telekom Austria 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 Unilever PLC and Telekom Austria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever PLC and Telekom Austria AG, you can compare the effects of market volatilities on Unilever PLC and Telekom Austria 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 Unilever PLC with a short position of Telekom Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever PLC and Telekom Austria.
Diversification Opportunities for Unilever PLC and Telekom Austria
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Unilever and Telekom is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Unilever PLC and Telekom Austria AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telekom Austria AG and Unilever 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 Unilever PLC are associated (or correlated) with Telekom Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telekom Austria AG has no effect on the direction of Unilever PLC i.e., Unilever PLC and Telekom Austria go up and down completely randomly.
Pair Corralation between Unilever PLC and Telekom Austria
Assuming the 90 days trading horizon Unilever PLC is expected to under-perform the Telekom Austria. But the stock apears to be less risky and, when comparing its historical volatility, Unilever PLC is 1.82 times less risky than Telekom Austria. The stock trades about -0.09 of its potential returns per unit of risk. The Telekom Austria AG is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 793.00 in Telekom Austria AG on August 29, 2024 and sell it today you would lose (15.00) from holding Telekom Austria AG or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever PLC vs. Telekom Austria AG
Performance |
| Timeline |
| Unilever PLC |
| Telekom Austria AG |
Unilever PLC and Telekom Austria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever PLC and Telekom Austria
The main advantage of trading using opposite Unilever PLC and Telekom Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever PLC position performs unexpectedly, Telekom Austria 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 Telekom Austria will offset losses from the drop in Telekom Austria's long position.| Unilever PLC vs. The Este Lauder | Unilever PLC vs. RATH Aktiengesellschaft | Unilever PLC vs. AT S Austria | Unilever PLC vs. BAWAG Group AG |
| Telekom Austria vs. Voestalpine AG | Telekom Austria vs. Oesterr Post AG | Telekom Austria vs. Wienerberger AG | Telekom Austria vs. VERBUND AG |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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