Correlation Between Global Health and Unibail Rodamco

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

By analyzing existing cross correlation between Global Health and Unibail Rodamco Westfield SE, you can compare the effects of market volatilities on Global Health and Unibail Rodamco 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 Global Health with a short position of Unibail Rodamco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Health and Unibail Rodamco.

Diversification Opportunities for Global Health and Unibail Rodamco

0.26

Correlation Coefficient

Global Health  Unibail Rodamco

Modest diversification

The 3 months correlation between Global and Unibail is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Global Health and Unibail Rodamco Westfield SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unibail Rodamco West and Global Health 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 Global Health are associated (or correlated) with Unibail Rodamco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unibail Rodamco West has no effect on the direction of Global Health i.e., Global Health and Unibail Rodamco go up and down completely randomly.

Pair Corralation between Global Health and Unibail Rodamco

Assuming the 90 days trading horizon Global Health is expected to generate 2.53 times more return on investment than Unibail Rodamco. However, Global Health is 2.53 times more volatile than Unibail Rodamco Westfield SE. It trades about 0.08 of its potential returns per unit of risk. Unibail Rodamco Westfield SE is currently generating about 0.06 per unit of risk. If you would invest  12.00  in Global Health on September 4, 2024 and sell it today you would earn a total of  2.00  from holding Global Health or generate 16.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Global Health  vs.  Unibail Rodamco Westfield SE

Global Health

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Health are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, Global Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

Unibail Rodamco West

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Unibail Rodamco Westfield SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Unibail Rodamco is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global Health and Unibail Rodamco

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

The idea behind Global Health and Unibail Rodamco Westfield SE 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.