Correlation Between United Internet and AS Latvijas
Can any of the company-specific risk be diversified away by investing in both United Internet and AS Latvijas 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 Internet and AS Latvijas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Internet AG and AS Latvijas balzams, you can compare the effects of market volatilities on United Internet and AS Latvijas 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 Internet with a short position of AS Latvijas. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and AS Latvijas.
Diversification Opportunities for United Internet and AS Latvijas
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and UM9 is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and AS Latvijas balzams in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AS Latvijas balzams and United Internet 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 Internet AG are associated (or correlated) with AS Latvijas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AS Latvijas balzams has no effect on the direction of United Internet i.e., United Internet and AS Latvijas go up and down completely randomly.
Pair Corralation between United Internet and AS Latvijas
Assuming the 90 days trading horizon United Internet AG is expected to under-perform the AS Latvijas. In addition to that, United Internet is 13.85 times more volatile than AS Latvijas balzams. It trades about -0.05 of its total potential returns per unit of risk. AS Latvijas balzams is currently generating about 0.09 per unit of volatility. If you would invest 890.00 in AS Latvijas balzams on September 15, 2024 and sell it today you would earn a total of 20.00 from holding AS Latvijas balzams or generate 2.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
United Internet AG vs. AS Latvijas balzams
Performance |
Timeline |
United Internet AG |
AS Latvijas balzams |
United Internet and AS Latvijas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Internet and AS Latvijas
The main advantage of trading using opposite United Internet and AS Latvijas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, AS Latvijas 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 AS Latvijas will offset losses from the drop in AS Latvijas' long position.United Internet vs. Superior Plus Corp | United Internet vs. SIVERS SEMICONDUCTORS AB | United Internet vs. Norsk Hydro ASA | United Internet vs. Reliance Steel Aluminum |
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Check out your portfolio center.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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