Correlation Between Unilever Plc and GLOBAL COSMED
Can any of the company-specific risk be diversified away by investing in both Unilever Plc and GLOBAL COSMED 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 GLOBAL COSMED into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever Plc and GLOBAL MED SA, you can compare the effects of market volatilities on Unilever Plc and GLOBAL COSMED 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 GLOBAL COSMED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Plc and GLOBAL COSMED.
Diversification Opportunities for Unilever Plc and GLOBAL COSMED
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Unilever and GLOBAL is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Plc and GLOBAL MED SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBAL MED SA 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 GLOBAL COSMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBAL MED SA has no effect on the direction of Unilever Plc i.e., Unilever Plc and GLOBAL COSMED go up and down completely randomly.
Pair Corralation between Unilever Plc and GLOBAL COSMED
Assuming the 90 days trading horizon Unilever Plc is expected to generate 5.88 times less return on investment than GLOBAL COSMED. But when comparing it to its historical volatility, Unilever Plc is 3.76 times less risky than GLOBAL COSMED. It trades about 0.05 of its potential returns per unit of risk. GLOBAL MED SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 41.00 in GLOBAL MED SA on October 23, 2024 and sell it today you would earn a total of 83.00 from holding GLOBAL MED SA or generate 202.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Unilever Plc vs. GLOBAL MED SA
Performance |
| Timeline |
| Unilever Plc |
| GLOBAL MED SA |
Unilever Plc and GLOBAL COSMED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Plc and GLOBAL COSMED
The main advantage of trading using opposite Unilever Plc and GLOBAL COSMED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Plc position performs unexpectedly, GLOBAL COSMED 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 GLOBAL COSMED will offset losses from the drop in GLOBAL COSMED's long position.| Unilever Plc vs. CarsalesCom | Unilever Plc vs. Sixt Leasing SE | Unilever Plc vs. Tsingtao Brewery | Unilever Plc vs. Monster Beverage Corp |
| GLOBAL COSMED vs. Scandinavian Tobacco Group | GLOBAL COSMED vs. bet at home AG | GLOBAL COSMED vs. Taylor Morrison Home | GLOBAL COSMED vs. ECHO INVESTMENT ZY |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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