Correlation Between Unifiedpost Group and Econocom Group

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

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

Diversification Opportunities for Unifiedpost Group and Econocom Group

0.29

Correlation Coefficient

Unifiedpost Group  Econocom Group

Modest diversification

The 3 months correlation between Unifiedpost and Econocom is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Unifiedpost Group SA and Econocom Group SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Econocom Group SANV and Unifiedpost Group 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 Unifiedpost Group SA are associated (or correlated) with Econocom Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Econocom Group SANV has no effect on the direction of Unifiedpost Group i.e., Unifiedpost Group and Econocom Group go up and down completely randomly.

Pair Corralation between Unifiedpost Group and Econocom Group

Assuming the 90 days trading horizon Unifiedpost Group SA is expected to generate 2.36 times more return on investment than Econocom Group. However, Unifiedpost Group is 2.36 times more volatile than Econocom Group SANV. It trades about -0.15 of its potential returns per unit of risk. Econocom Group SANV is currently generating about -0.43 per unit of risk. If you would invest  352.00  in Unifiedpost Group SA on September 19, 2024 and sell it today you would lose (30.00) from holding Unifiedpost Group SA or give up 8.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Unifiedpost Group SA  vs.  Econocom Group SANV

Unifiedpost Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unifiedpost Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Econocom Group SANV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Econocom Group SANV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Unifiedpost Group and Econocom Group

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

The idea behind Unifiedpost Group SA and Econocom Group SANV 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.