Correlation Between True Games and UniCredit SpA

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

By analyzing existing cross correlation between True Games Syndicate and UniCredit SpA, you can compare the effects of market volatilities on True Games and UniCredit SpA 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 True Games with a short position of UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of True Games and UniCredit SpA.

Diversification Opportunities for True Games and UniCredit SpA

-0.05

Correlation Coefficient

True Games  UniCredit SpA

Good diversification

The 3 months correlation between True and UniCredit is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding True Games Syndicate and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA and True Games 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 True Games Syndicate are associated (or correlated) with UniCredit SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit SpA has no effect on the direction of True Games i.e., True Games and UniCredit SpA go up and down completely randomly.

Pair Corralation between True Games and UniCredit SpA

Assuming the 90 days trading horizon True Games Syndicate is expected to under-perform the UniCredit SpA. In addition to that, True Games is 2.16 times more volatile than UniCredit SpA. It trades about -0.07 of its total potential returns per unit of risk. UniCredit SpA is currently generating about -0.01 per unit of volatility. If you would invest  16,848  in UniCredit SpA on September 30, 2024 and sell it today you would lose (398.00) from holding UniCredit SpA or give up 2.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.83%
Values	Daily Returns

True Games Syndicate  vs.  UniCredit SpA

True Games Syndicate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days True Games Syndicate has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

UniCredit SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UniCredit SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, UniCredit SpA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with True Games and UniCredit SpA

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

The idea behind True Games Syndicate and UniCredit SpA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.