Correlation Between Unicharm Corp and LOral SA
Can any of the company-specific risk be diversified away by investing in both Unicharm Corp and LOral SA 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 Unicharm Corp and LOral SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unicharm Corp and LOral SA, you can compare the effects of market volatilities on Unicharm Corp and LOral SA 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 Unicharm Corp with a short position of LOral SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unicharm Corp and LOral SA.
Diversification Opportunities for Unicharm Corp and LOral SA
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Unicharm and LOral is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Unicharm Corp and LOral SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOral SA and Unicharm Corp 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 Unicharm Corp are associated (or correlated) with LOral SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOral SA has no effect on the direction of Unicharm Corp i.e., Unicharm Corp and LOral SA go up and down completely randomly.
Pair Corralation between Unicharm Corp and LOral SA
Assuming the 90 days horizon Unicharm Corp is expected to under-perform the LOral SA. In addition to that, Unicharm Corp is 1.04 times more volatile than LOral SA. It trades about -0.14 of its total potential returns per unit of risk. LOral SA is currently generating about 0.09 per unit of volatility. If you would invest 35,800 in LOral SA on September 12, 2024 and sell it today you would earn a total of 1,200 from holding LOral SA or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unicharm Corp vs. LOral SA
Performance |
| Timeline |
| Unicharm Corp |
| LOral SA |
Unicharm Corp and LOral SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unicharm Corp and LOral SA
The main advantage of trading using opposite Unicharm Corp and LOral SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unicharm Corp position performs unexpectedly, LOral SA 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 LOral SA will offset losses from the drop in LOral SA's long position.| Unicharm Corp vs. Kao Corporation | Unicharm Corp vs. Unilever PLC ADR | Unicharm Corp vs. Hims Hers Health | Unicharm Corp vs. Hengan International Group |
| LOral SA vs. Inter Parfums | LOral SA vs. European Wax Center | LOral SA vs. Estee Lauder Companies | LOral SA vs. Reckitt Benckiser Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| CEOs Directory Screen CEOs from public companies around the world | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |