Correlation Between United Utilities and Corporacion America
Can any of the company-specific risk be diversified away by investing in both United Utilities and Corporacion America 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 Corporacion America 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 Corporacion America Airports, you can compare the effects of market volatilities on United Utilities and Corporacion America 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 Corporacion America. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Utilities and Corporacion America.
Diversification Opportunities for United Utilities and Corporacion America
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Corporacion is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding United Utilities Group and Corporacion America Airports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion America 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 Corporacion America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion America has no effect on the direction of United Utilities i.e., United Utilities and Corporacion America go up and down completely randomly.
Pair Corralation between United Utilities and Corporacion America
Assuming the 90 days horizon United Utilities is expected to generate 2.48 times less return on investment than Corporacion America. But when comparing it to its historical volatility, United Utilities Group is 1.79 times less risky than Corporacion America. It trades about 0.03 of its potential returns per unit of risk. Corporacion America Airports is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,724 in Corporacion America Airports on September 5, 2024 and sell it today you would earn a total of 158.00 from holding Corporacion America Airports or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
United Utilities Group vs. Corporacion America Airports
Performance |
| Timeline |
| United Utilities |
| Corporacion America |
United Utilities and Corporacion America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Utilities and Corporacion America
The main advantage of trading using opposite United Utilities and Corporacion America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Utilities position performs unexpectedly, Corporacion America 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 Corporacion America will offset losses from the drop in Corporacion America's long position.| United Utilities vs. Artesian Resources | United Utilities vs. Global Water Resources | United Utilities vs. Essential Utilities | United Utilities vs. American Water Works |
| Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. AerSale Corp | Corporacion America vs. Flughafen Zrich AG |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance |