Correlation Between Unifique Telecomunicaes and GP Investments

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

By analyzing existing cross correlation between Unifique Telecomunicaes SA and GP Investments, you can compare the effects of market volatilities on Unifique Telecomunicaes and GP Investments 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 Unifique Telecomunicaes with a short position of GP Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unifique Telecomunicaes and GP Investments.

Diversification Opportunities for Unifique Telecomunicaes and GP Investments

0.0

Correlation Coefficient

Unifique Telecomunicaes  GP Investments

Pay attention - limited upside

The 3 months correlation between Unifique and GPIV33 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Unifique Telecomunicaes SA and GP Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Investments and Unifique Telecomunicaes 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 Unifique Telecomunicaes SA are associated (or correlated) with GP Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Investments has no effect on the direction of Unifique Telecomunicaes i.e., Unifique Telecomunicaes and GP Investments go up and down completely randomly.

Pair Corralation between Unifique Telecomunicaes and GP Investments

Assuming the 90 days trading horizon Unifique Telecomunicaes SA is expected to generate 0.53 times more return on investment than GP Investments. However, Unifique Telecomunicaes SA is 1.87 times less risky than GP Investments. It trades about -0.08 of its potential returns per unit of risk. GP Investments is currently generating about -0.12 per unit of risk. If you would invest  382.00  in Unifique Telecomunicaes SA on September 28, 2024 and sell it today you would lose (43.00) from holding Unifique Telecomunicaes SA or give up 11.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Unifique Telecomunicaes SA  vs.  GP Investments

Unifique Telecomunicaes

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unifique Telecomunicaes SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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.

GP Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GP Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Unifique Telecomunicaes and GP Investments

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

The idea behind Unifique Telecomunicaes SA and GP Investments 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.