Correlation Between Vercom SA and UniCredit SpA
Can any of the company-specific risk be diversified away by investing in both Vercom SA and UniCredit SpA 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 Vercom SA and UniCredit SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vercom SA and UniCredit SpA, you can compare the effects of market volatilities on Vercom SA and UniCredit SpA 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 Vercom SA with a short position of UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vercom SA and UniCredit SpA.
Diversification Opportunities for Vercom SA and UniCredit SpA
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vercom and UniCredit is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Vercom SA and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA and Vercom SA 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 Vercom SA are associated (or correlated) with UniCredit SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit SpA has no effect on the direction of Vercom SA i.e., Vercom SA and UniCredit SpA go up and down completely randomly.
Pair Corralation between Vercom SA and UniCredit SpA
Assuming the 90 days trading horizon Vercom SA is expected to generate 0.58 times more return on investment than UniCredit SpA. However, Vercom SA is 1.73 times less risky than UniCredit SpA. It trades about -0.12 of its potential returns per unit of risk. UniCredit SpA is currently generating about -0.24 per unit of risk. If you would invest 11,900 in Vercom SA on August 30, 2024 and sell it today you would lose (450.00) from holding Vercom SA or give up 3.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Vercom SA vs. UniCredit SpA
Performance |
| Timeline |
| Vercom SA |
| UniCredit SpA |
Vercom SA and UniCredit SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vercom SA and UniCredit SpA
The main advantage of trading using opposite Vercom SA and UniCredit SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vercom SA position performs unexpectedly, UniCredit SpA 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 UniCredit SpA will offset losses from the drop in UniCredit SpA's long position.| Vercom SA vs. Banco Santander SA | Vercom SA vs. UniCredit SpA | Vercom SA vs. CEZ as | Vercom SA vs. Polski Koncern Naftowy |
| UniCredit SpA vs. 3R Games SA | UniCredit SpA vs. Enter Air SA | UniCredit SpA vs. Mercator Medical SA | UniCredit SpA vs. Baked Games SA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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