Correlation Between United Internet and BlackRock Frontiers

Can any of the company-specific risk be diversified away by investing in both United Internet and BlackRock Frontiers 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 BlackRock Frontiers 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 BlackRock Frontiers Investment, you can compare the effects of market volatilities on United Internet and BlackRock Frontiers 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 BlackRock Frontiers. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and BlackRock Frontiers.

Diversification Opportunities for United Internet and BlackRock Frontiers

-0.25

Correlation Coefficient

United Internet  BlackRock Frontiers

Very good diversification

The 3 months correlation between United and BlackRock is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and BlackRock Frontiers Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Frontiers 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 BlackRock Frontiers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Frontiers has no effect on the direction of United Internet i.e., United Internet and BlackRock Frontiers go up and down completely randomly.

Pair Corralation between United Internet and BlackRock Frontiers

Assuming the 90 days trading horizon United Internet AG is expected to generate 1.91 times more return on investment than BlackRock Frontiers. However, United Internet is 1.91 times more volatile than BlackRock Frontiers Investment. It trades about 0.17 of its potential returns per unit of risk. BlackRock Frontiers Investment is currently generating about -0.01 per unit of risk. If you would invest  1,523  in United Internet AG on December 25, 2024 and sell it today you would earn a total of  345.00  from holding United Internet AG or generate 22.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

United Internet AG  vs.  BlackRock Frontiers Investment

United Internet AG

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Internet AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, United Internet unveiled solid returns over the last few months and may actually be approaching a breakup point.

BlackRock Frontiers

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock Frontiers Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BlackRock Frontiers is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with United Internet and BlackRock Frontiers

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

The idea behind United Internet AG and BlackRock Frontiers Investment 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.