Correlation Between Uniper SE and GoldMining

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

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

Diversification Opportunities for Uniper SE and GoldMining

-0.11

Correlation Coefficient

Uniper SE  GoldMining

Good diversification

The 3 months correlation between Uniper and GoldMining is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Uniper SE i.e., Uniper SE and GoldMining go up and down completely randomly.

Pair Corralation between Uniper SE and GoldMining

Assuming the 90 days trading horizon Uniper SE is expected to generate 1.07 times more return on investment than GoldMining. However, Uniper SE is 1.07 times more volatile than GoldMining. It trades about -0.11 of its potential returns per unit of risk. GoldMining is currently generating about -0.18 per unit of risk. If you would invest  4,168  in Uniper SE on September 23, 2024 and sell it today you would lose (213.00) from holding Uniper SE or give up 5.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.36%
Values	Daily Returns

Uniper SE  vs.  GoldMining

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.

GoldMining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GoldMining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Uniper SE and GoldMining

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

The idea behind Uniper SE and GoldMining 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.