Correlation Between Uniper SE and Bath Body
Can any of the company-specific risk be diversified away by investing in both Uniper SE and Bath Body 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 Bath Body into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and Bath Body Works, you can compare the effects of market volatilities on Uniper SE and Bath Body 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 Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Bath Body.
Diversification Opportunities for Uniper SE and Bath Body
Excellent diversification
The 3 months correlation between Uniper and Bath is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works 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 Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of Uniper SE i.e., Uniper SE and Bath Body go up and down completely randomly.
Pair Corralation between Uniper SE and Bath Body
Assuming the 90 days trading horizon Uniper SE is expected to under-perform the Bath Body. But the stock apears to be less risky and, when comparing its historical volatility, Uniper SE is 1.15 times less risky than Bath Body. The stock trades about -0.06 of its potential returns per unit of risk. The Bath Body Works is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,006 in Bath Body Works on September 23, 2024 and sell it today you would earn a total of 936.00 from holding Bath Body Works or generate 31.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Uniper SE vs. Bath Body Works
Performance |
Timeline |
Uniper SE |
Bath Body Works |
Uniper SE and Bath Body Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Uniper SE and Bath Body
The main advantage of trading using opposite Uniper SE and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body'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 |
Bath Body vs. Uniper SE | Bath Body vs. Mulberry Group PLC | Bath Body vs. London Security Plc | Bath Body 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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