Correlation Between WSE WIG and UniCredit SpA
Can any of the company-specific risk be diversified away by investing in both WSE WIG 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 WSE WIG and UniCredit SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WSE WIG INDEX and UniCredit SpA, you can compare the effects of market volatilities on WSE WIG 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 WSE WIG with a short position of UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of WSE WIG and UniCredit SpA.
Diversification Opportunities for WSE WIG and UniCredit SpA
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WSE and UniCredit is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding WSE WIG INDEX and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA and WSE WIG 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 WSE WIG INDEX 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 WSE WIG i.e., WSE WIG and UniCredit SpA go up and down completely randomly.
Pair Corralation between WSE WIG and UniCredit SpA
Assuming the 90 days trading horizon WSE WIG is expected to generate 4.61 times less return on investment than UniCredit SpA. But when comparing it to its historical volatility, WSE WIG INDEX is 4.19 times less risky than UniCredit SpA. It trades about 0.07 of its potential returns per unit of risk. UniCredit SpA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,900 in UniCredit SpA on September 3, 2024 and sell it today you would earn a total of 9,762 from holding UniCredit SpA or generate 165.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.04% |
| Values | Daily Returns |
WSE WIG INDEX vs. UniCredit SpA
Performance |
| Timeline |
WSE WIG and UniCredit SpA Volatility Contrast
Predicted Return Density |
| Returns |
WSE WIG INDEX
Pair trading matchups for WSE WIG
UniCredit SpA
Pair trading matchups for UniCredit SpA
Pair Trading with WSE WIG and UniCredit SpA
The main advantage of trading using opposite WSE WIG and UniCredit SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WSE WIG 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.| WSE WIG vs. Alior Bank SA | WSE WIG vs. Creotech Instruments SA | WSE WIG vs. PZ Cormay SA | WSE WIG vs. Road Studio SA |
| UniCredit SpA vs. Gamedust SA | UniCredit SpA vs. Mercator Medical SA | UniCredit SpA vs. Ultimate Games SA | UniCredit SpA vs. Quantum Software 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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