Correlation Between UNITED UTILITIES and STANDARD CHARTUNSPADR/2
Can any of the company-specific risk be diversified away by investing in both UNITED UTILITIES and STANDARD CHARTUNSPADR/2 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 UNITED UTILITIES and STANDARD CHARTUNSPADR/2 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED UTILITIES GR and STANDARD CHARTUNSPADR2, you can compare the effects of market volatilities on UNITED UTILITIES and STANDARD CHARTUNSPADR/2 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 UNITED UTILITIES with a short position of STANDARD CHARTUNSPADR/2. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED UTILITIES and STANDARD CHARTUNSPADR/2.
Diversification Opportunities for UNITED UTILITIES and STANDARD CHARTUNSPADR/2
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UNITED and STANDARD is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding UNITED UTILITIES GR and STANDARD CHARTUNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STANDARD CHARTUNSPADR/2 and UNITED UTILITIES 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 UNITED UTILITIES GR are associated (or correlated) with STANDARD CHARTUNSPADR/2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STANDARD CHARTUNSPADR/2 has no effect on the direction of UNITED UTILITIES i.e., UNITED UTILITIES and STANDARD CHARTUNSPADR/2 go up and down completely randomly.
Pair Corralation between UNITED UTILITIES and STANDARD CHARTUNSPADR/2
Assuming the 90 days trading horizon UNITED UTILITIES GR is expected to under-perform the STANDARD CHARTUNSPADR/2. But the stock apears to be less risky and, when comparing its historical volatility, UNITED UTILITIES GR is 1.3 times less risky than STANDARD CHARTUNSPADR/2. The stock trades about -0.03 of its potential returns per unit of risk. The STANDARD CHARTUNSPADR2 is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,740 in STANDARD CHARTUNSPADR2 on December 4, 2024 and sell it today you would earn a total of 1,540 from holding STANDARD CHARTUNSPADR2 or generate 88.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
UNITED UTILITIES GR vs. STANDARD CHARTUNSPADR2
Performance |
| Timeline |
| UNITED UTILITIES |
| STANDARD CHARTUNSPADR/2 |
UNITED UTILITIES and STANDARD CHARTUNSPADR/2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED UTILITIES and STANDARD CHARTUNSPADR/2
The main advantage of trading using opposite UNITED UTILITIES and STANDARD CHARTUNSPADR/2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED UTILITIES position performs unexpectedly, STANDARD CHARTUNSPADR/2 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 STANDARD CHARTUNSPADR/2 will offset losses from the drop in STANDARD CHARTUNSPADR/2's long position.| UNITED UTILITIES vs. CENTURIA OFFICE REIT | UNITED UTILITIES vs. Chesapeake Utilities | UNITED UTILITIES vs. Algonquin Power Utilities | UNITED UTILITIES vs. ANGI Homeservices |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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