Correlation Between Implenia and U Blox

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

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

Diversification Opportunities for Implenia and U Blox

0.79

Correlation Coefficient

Implenia  U Blox

Poor diversification

The 3 months correlation between Implenia and UBXN is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Implenia AG and U Blox Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Blox Holding and Implenia 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 Implenia AG are associated (or correlated) with U Blox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Blox Holding has no effect on the direction of Implenia i.e., Implenia and U Blox go up and down completely randomly.

Pair Corralation between Implenia and U Blox

Assuming the 90 days trading horizon Implenia AG is expected to generate 0.55 times more return on investment than U Blox. However, Implenia AG is 1.83 times less risky than U Blox. It trades about -0.06 of its potential returns per unit of risk. U Blox Holding is currently generating about -0.07 per unit of risk. If you would invest  3,180  in Implenia AG on September 16, 2024 and sell it today you would lose (130.00) from holding Implenia AG or give up 4.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Implenia AG  vs.  U Blox Holding

Implenia AG

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Implenia AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Implenia is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

U Blox Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days U Blox Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, U Blox is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Implenia and U Blox

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

The idea behind Implenia AG and U Blox Holding 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 Global Correlations module to find global opportunities by holding instruments from different markets.