Correlation Between Uniper SE and Dollar Tree
Can any of the company-specific risk be diversified away by investing in both Uniper SE and Dollar Tree 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 Dollar Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and Dollar Tree, you can compare the effects of market volatilities on Uniper SE and Dollar Tree 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 Dollar Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Dollar Tree.
Diversification Opportunities for Uniper SE and Dollar Tree
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Uniper and Dollar is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Dollar Tree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar Tree 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 Dollar Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar Tree has no effect on the direction of Uniper SE i.e., Uniper SE and Dollar Tree go up and down completely randomly.
Pair Corralation between Uniper SE and Dollar Tree
Assuming the 90 days trading horizon Uniper SE is expected to generate 1.64 times more return on investment than Dollar Tree. However, Uniper SE is 1.64 times more volatile than Dollar Tree. It trades about 0.0 of its potential returns per unit of risk. Dollar Tree is currently generating about -0.04 per unit of risk. If you would invest 6,316 in Uniper SE on September 24, 2024 and sell it today you would lose (2,361) from holding Uniper SE or give up 37.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.2% |
Values | Daily Returns |
Uniper SE vs. Dollar Tree
Performance |
Timeline |
Uniper SE |
Dollar Tree |
Uniper SE and Dollar Tree Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Uniper SE and Dollar Tree
The main advantage of trading using opposite Uniper SE and Dollar Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, Dollar Tree 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 Dollar Tree will offset losses from the drop in Dollar Tree'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 |
Dollar Tree vs. Uniper SE | Dollar Tree vs. Mulberry Group PLC | Dollar Tree vs. London Security Plc | Dollar Tree 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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