Correlation Between United Utilities and MBH PLC
Can any of the company-specific risk be diversified away by investing in both United Utilities and MBH PLC 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 MBH PLC 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 MBH PLC, you can compare the effects of market volatilities on United Utilities and MBH PLC 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 MBH PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Utilities and MBH PLC.
Diversification Opportunities for United Utilities and MBH PLC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and MBH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Utilities Group and MBH PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MBH PLC 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 MBH PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MBH PLC has no effect on the direction of United Utilities i.e., United Utilities and MBH PLC go up and down completely randomly.
Pair Corralation between United Utilities and MBH PLC
If you would invest 1,355 in United Utilities Group on September 14, 2024 and sell it today you would earn a total of 39.00 from holding United Utilities Group or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
United Utilities Group vs. MBH PLC
Performance |
| Timeline |
| United Utilities |
| MBH PLC |
United Utilities and MBH PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Utilities and MBH PLC
The main advantage of trading using opposite United Utilities and MBH PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Utilities position performs unexpectedly, MBH PLC 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 MBH PLC will offset losses from the drop in MBH PLC'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 |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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