Correlation Between United Amern and Sanwire

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

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

Diversification Opportunities for United Amern and Sanwire

0.31

Correlation Coefficient

United Amern  Sanwire

Weak diversification

The 3 months correlation between United and Sanwire is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding United Amern Pete and Sanwire in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanwire and United Amern 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 United Amern Pete are associated (or correlated) with Sanwire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanwire has no effect on the direction of United Amern i.e., United Amern and Sanwire go up and down completely randomly.

Pair Corralation between United Amern and Sanwire

Given the investment horizon of 90 days United Amern Pete is expected to generate 0.99 times more return on investment than Sanwire. However, United Amern Pete is 1.01 times less risky than Sanwire. It trades about 0.03 of its potential returns per unit of risk. Sanwire is currently generating about 0.03 per unit of risk. If you would invest  0.11  in United Amern Pete on October 1, 2024 and sell it today you would lose (0.03) from holding United Amern Pete or give up 27.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

United Amern Pete  vs.  Sanwire

United Amern Pete

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in United Amern Pete are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, United Amern exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sanwire

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sanwire are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Sanwire reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Amern and Sanwire

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

The idea behind United Amern Pete and Sanwire 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.