Correlation Between CONCORDIA FINL and Unilever PLC
Can any of the company-specific risk be diversified away by investing in both CONCORDIA FINL and Unilever 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 CONCORDIA FINL and Unilever PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CONCORDIA FINL GROUP and Unilever PLC, you can compare the effects of market volatilities on CONCORDIA FINL and Unilever 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 CONCORDIA FINL with a short position of Unilever PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONCORDIA FINL and Unilever PLC.
Diversification Opportunities for CONCORDIA FINL and Unilever PLC
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CONCORDIA and Unilever is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CONCORDIA FINL GROUP and Unilever PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever PLC and CONCORDIA FINL 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 CONCORDIA FINL GROUP are associated (or correlated) with Unilever PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever PLC has no effect on the direction of CONCORDIA FINL i.e., CONCORDIA FINL and Unilever PLC go up and down completely randomly.
Pair Corralation between CONCORDIA FINL and Unilever PLC
Assuming the 90 days horizon CONCORDIA FINL GROUP is expected to generate 1.11 times more return on investment than Unilever PLC. However, CONCORDIA FINL is 1.11 times more volatile than Unilever PLC. It trades about 0.04 of its potential returns per unit of risk. Unilever PLC is currently generating about -0.17 per unit of risk. If you would invest 530.00 in CONCORDIA FINL GROUP on October 20, 2024 and sell it today you would earn a total of 5.00 from holding CONCORDIA FINL GROUP or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CONCORDIA FINL GROUP vs. Unilever PLC
Performance |
| Timeline |
| CONCORDIA FINL GROUP |
| Unilever PLC |
CONCORDIA FINL and Unilever PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CONCORDIA FINL and Unilever PLC
The main advantage of trading using opposite CONCORDIA FINL and Unilever PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONCORDIA FINL position performs unexpectedly, Unilever 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 Unilever PLC will offset losses from the drop in Unilever PLC's long position.| CONCORDIA FINL vs. China Merchants Bank | CONCORDIA FINL vs. HDFC Bank Limited | CONCORDIA FINL vs. ICICI Bank Limited | CONCORDIA FINL vs. PT Bank Central |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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