Correlation Between Eutelsat and United Internet

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

By analyzing existing cross correlation between Eutelsat Group and United Internet AG, you can compare the effects of market volatilities on Eutelsat 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 Eutelsat with a short position of United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eutelsat and United Internet.

Diversification Opportunities for Eutelsat and United Internet

-0.06

Correlation Coefficient

Eutelsat  United Internet

Good diversification

The 3 months correlation between Eutelsat and United is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Eutelsat Group 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 Eutelsat 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 Eutelsat Group 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 Eutelsat i.e., Eutelsat and United Internet go up and down completely randomly.

Pair Corralation between Eutelsat and United Internet

Assuming the 90 days trading horizon Eutelsat Group is expected to generate 1.06 times more return on investment than United Internet. However, Eutelsat is 1.06 times more volatile than United Internet AG. It trades about 0.01 of its potential returns per unit of risk. United Internet AG is currently generating about -0.08 per unit of risk. If you would invest  426.00  in Eutelsat Group on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Eutelsat Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Eutelsat Group  vs.  United Internet AG

Eutelsat Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eutelsat Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Eutelsat is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

United Internet AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Internet AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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 Eutelsat and United Internet

The main advantage of trading using opposite Eutelsat and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eutelsat 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.

The idea behind Eutelsat Group and United Internet AG 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.