Correlation Between Unilever PLC and Ebusco Holding
Can any of the company-specific risk be diversified away by investing in both Unilever PLC and Ebusco Holding 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 Ebusco Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever PLC and Ebusco Holding BV, you can compare the effects of market volatilities on Unilever PLC and Ebusco Holding 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 Ebusco Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever PLC and Ebusco Holding.
Diversification Opportunities for Unilever PLC and Ebusco Holding
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Unilever and Ebusco is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Unilever PLC and Ebusco Holding BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebusco Holding BV 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 Ebusco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebusco Holding BV has no effect on the direction of Unilever PLC i.e., Unilever PLC and Ebusco Holding go up and down completely randomly.
Pair Corralation between Unilever PLC and Ebusco Holding
Assuming the 90 days trading horizon Unilever PLC is expected to generate 0.04 times more return on investment than Ebusco Holding. However, Unilever PLC is 22.58 times less risky than Ebusco Holding. It trades about -0.07 of its potential returns per unit of risk. Ebusco Holding BV is currently generating about -0.1 per unit of risk. If you would invest 5,538 in Unilever PLC on August 24, 2024 and sell it today you would lose (82.00) from holding Unilever PLC or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever PLC vs. Ebusco Holding BV
Performance |
| Timeline |
| Unilever PLC |
| Ebusco Holding BV |
Unilever PLC and Ebusco Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever PLC and Ebusco Holding
The main advantage of trading using opposite Unilever PLC and Ebusco Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever PLC position performs unexpectedly, Ebusco Holding 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 Ebusco Holding will offset losses from the drop in Ebusco Holding's long position.| Unilever PLC vs. Koninklijke Philips NV | Unilever PLC vs. Koninklijke Ahold Delhaize | Unilever PLC vs. ING Groep NV | Unilever PLC vs. Heineken |
| Ebusco Holding vs. CM NV | Ebusco Holding vs. BE Semiconductor Industries | Ebusco Holding vs. Alfen Beheer BV | Ebusco Holding vs. ASR Nederland NV |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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