Correlation Between Paccar and Uniper SE

Can any of the company-specific risk be diversified away by investing in both Paccar and Uniper SE 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 Paccar and Uniper SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Paccar Inc and Uniper SE, you can compare the effects of market volatilities on Paccar and Uniper SE 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 Paccar with a short position of Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paccar and Uniper SE.

Diversification Opportunities for Paccar and Uniper SE

-0.79

Correlation Coefficient

Paccar  Uniper SE

Pay attention - limited upside

The 3 months correlation between Paccar and Uniper is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Paccar Inc and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and Paccar 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 Paccar Inc are associated (or correlated) with Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Paccar i.e., Paccar and Uniper SE go up and down completely randomly.

Pair Corralation between Paccar and Uniper SE

Assuming the 90 days trading horizon Paccar Inc is expected to generate 0.68 times more return on investment than Uniper SE. However, Paccar Inc is 1.47 times less risky than Uniper SE. It trades about 0.09 of its potential returns per unit of risk. Uniper SE is currently generating about -0.06 per unit of risk. If you would invest  9,609  in Paccar Inc on September 23, 2024 and sell it today you would earn a total of  969.00  from holding Paccar Inc or generate 10.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.48%
Values	Daily Returns

Paccar Inc  vs.  Uniper SE

Paccar Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Paccar Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Paccar may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Uniper SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniper SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Paccar and Uniper SE

The main advantage of trading using opposite Paccar and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paccar position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.

The idea behind Paccar Inc and Uniper SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.