Correlation Between United Utilities and PLAY2CHILL
Can any of the company-specific risk be diversified away by investing in both United Utilities and PLAY2CHILL 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 PLAY2CHILL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Utilities Group and PLAY2CHILL SA ZY, you can compare the effects of market volatilities on United Utilities and PLAY2CHILL 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 PLAY2CHILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Utilities and PLAY2CHILL.
Diversification Opportunities for United Utilities and PLAY2CHILL
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and PLAY2CHILL is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding United Utilities Group and PLAY2CHILL SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAY2CHILL SA ZY 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 Group are associated (or correlated) with PLAY2CHILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAY2CHILL SA ZY has no effect on the direction of United Utilities i.e., United Utilities and PLAY2CHILL go up and down completely randomly.
Pair Corralation between United Utilities and PLAY2CHILL
Assuming the 90 days trading horizon United Utilities Group is expected to generate 0.6 times more return on investment than PLAY2CHILL. However, United Utilities Group is 1.66 times less risky than PLAY2CHILL. It trades about 0.04 of its potential returns per unit of risk. PLAY2CHILL SA ZY is currently generating about -0.01 per unit of risk. If you would invest 1,035 in United Utilities Group on September 14, 2024 and sell it today you would earn a total of 265.00 from holding United Utilities Group or generate 25.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Utilities Group vs. PLAY2CHILL SA ZY
Performance |
| Timeline |
| United Utilities |
| PLAY2CHILL SA ZY |
United Utilities and PLAY2CHILL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Utilities and PLAY2CHILL
The main advantage of trading using opposite United Utilities and PLAY2CHILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Utilities position performs unexpectedly, PLAY2CHILL 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 PLAY2CHILL will offset losses from the drop in PLAY2CHILL's long position.| United Utilities vs. Guangdong Investment Limited | United Utilities vs. China Water Affairs | United Utilities vs. Superior Plus Corp | United Utilities vs. SIVERS SEMICONDUCTORS AB |
| PLAY2CHILL vs. MAVEN WIRELESS SWEDEN | PLAY2CHILL vs. JAPAN TOBACCO UNSPADR12 | PLAY2CHILL vs. Verizon Communications | PLAY2CHILL vs. United Utilities 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |