Correlation Between UniCredit SpA and PCC Rokita

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

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

Diversification Opportunities for UniCredit SpA and PCC Rokita

-0.14

Correlation Coefficient

UniCredit SpA  PCC Rokita

Good diversification

The 3 months correlation between UniCredit and PCC is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and PCC Rokita SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCC Rokita SA and UniCredit SpA 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 UniCredit SpA are associated (or correlated) with PCC Rokita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCC Rokita SA has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and PCC Rokita go up and down completely randomly.

Pair Corralation between UniCredit SpA and PCC Rokita

Assuming the 90 days trading horizon UniCredit SpA is expected to generate 1.78 times more return on investment than PCC Rokita. However, UniCredit SpA is 1.78 times more volatile than PCC Rokita SA. It trades about 0.07 of its potential returns per unit of risk. PCC Rokita SA is currently generating about -0.2 per unit of risk. If you would invest  15,504  in UniCredit SpA on September 12, 2024 and sell it today you would earn a total of  1,046  from holding UniCredit SpA or generate 6.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

UniCredit SpA  vs.  PCC Rokita SA

UniCredit SpA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UniCredit SpA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, UniCredit SpA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PCC Rokita SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PCC Rokita SA 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.

Pair Trading with UniCredit SpA and PCC Rokita

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

The idea behind UniCredit SpA and PCC Rokita SA 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.