Correlation Between Uniphar Group and Great Western
Can any of the company-specific risk be diversified away by investing in both Uniphar Group and Great Western 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 Uniphar Group and Great Western into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniphar Group PLC and Great Western Mining, you can compare the effects of market volatilities on Uniphar Group and Great Western 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 Uniphar Group with a short position of Great Western. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniphar Group and Great Western.
Diversification Opportunities for Uniphar Group and Great Western
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Uniphar and Great is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Uniphar Group PLC and Great Western Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Western Mining and Uniphar Group 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 Uniphar Group PLC are associated (or correlated) with Great Western. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Western Mining has no effect on the direction of Uniphar Group i.e., Uniphar Group and Great Western go up and down completely randomly.
Pair Corralation between Uniphar Group and Great Western
Assuming the 90 days trading horizon Uniphar Group PLC is expected to under-perform the Great Western. But the stock apears to be less risky and, when comparing its historical volatility, Uniphar Group PLC is 14.3 times less risky than Great Western. The stock trades about -0.31 of its potential returns per unit of risk. The Great Western Mining is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 0.05 in Great Western Mining on August 28, 2024 and sell it today you would earn a total of 0.10 from holding Great Western Mining or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uniphar Group PLC vs. Great Western Mining
Performance |
| Timeline |
| Uniphar Group PLC |
| Great Western Mining |
Uniphar Group and Great Western Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniphar Group and Great Western
The main advantage of trading using opposite Uniphar Group and Great Western positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniphar Group position performs unexpectedly, Great Western 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 Great Western will offset losses from the drop in Great Western's long position.| Uniphar Group vs. Dalata Hotel Group | Uniphar Group vs. Kingspan Group plc | Uniphar Group vs. AIB Group PLC | Uniphar Group vs. Glanbia PLC |
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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.
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