Correlation Between Uniper SE and United Internet
Can any of the company-specific risk be diversified away by investing in both Uniper SE and United Internet 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 Uniper SE and United Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and United Internet AG, you can compare the effects of market volatilities on Uniper SE and United Internet 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 Uniper SE with a short position of United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and United Internet.
Diversification Opportunities for Uniper SE and United Internet
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uniper and United is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet AG and Uniper SE 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 Uniper SE are associated (or correlated) with United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of Uniper SE i.e., Uniper SE and United Internet go up and down completely randomly.
Pair Corralation between Uniper SE and United Internet
Assuming the 90 days trading horizon Uniper SE is expected to under-perform the United Internet. In addition to that, Uniper SE is 1.87 times more volatile than United Internet AG. It trades about -0.13 of its total potential returns per unit of risk. United Internet AG is currently generating about -0.18 per unit of volatility. If you would invest 1,574 in United Internet AG on September 24, 2024 and sell it today you would lose (69.00) from holding United Internet AG or give up 4.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Uniper SE vs. United Internet AG
Performance |
Timeline |
Uniper SE |
United Internet AG |
Uniper SE and United Internet Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Uniper SE and United Internet
The main advantage of trading using opposite Uniper SE and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.Uniper SE vs. Mulberry Group PLC | Uniper SE vs. London Security Plc | Uniper SE vs. Triad Group PLC | Uniper SE vs. SURETRACK MON |
United Internet vs. Uniper SE | United Internet vs. Mulberry Group PLC | United Internet vs. London Security Plc | United Internet vs. Triad Group PLC |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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