Correlation Between United Internet and Fulcrum Metals

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

Diversification Opportunities for United Internet and Fulcrum Metals

0.67

Correlation Coefficient

United Internet  Fulcrum Metals

Poor diversification

The 3 months correlation between United and Fulcrum is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and Fulcrum Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Metals PLC 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 Fulcrum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Metals PLC has no effect on the direction of United Internet i.e., United Internet and Fulcrum Metals go up and down completely randomly.

Pair Corralation between United Internet and Fulcrum Metals

If you would invest  1,560  in United Internet AG on September 17, 2024 and sell it today you would earn a total of  23.00  from holding United Internet AG or generate 1.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

United Internet AG  vs.  Fulcrum Metals PLC

United Internet AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days United Internet AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fulcrum Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fulcrum Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with United Internet and Fulcrum Metals

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

The idea behind United Internet AG and Fulcrum Metals PLC 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.