Correlation Between Storebrand Global and Uniphar Group

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

By analyzing existing cross correlation between Storebrand Global Solutions and Uniphar Group PLC, you can compare the effects of market volatilities on Storebrand Global and Uniphar 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 Storebrand Global with a short position of Uniphar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Storebrand Global and Uniphar Group.

Diversification Opportunities for Storebrand Global and Uniphar Group

-0.64

Correlation Coefficient

Storebrand Global  Uniphar Group

Excellent diversification

The 3 months correlation between Storebrand and Uniphar is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Storebrand Global Solutions and Uniphar Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniphar Group PLC and Storebrand Global 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 Storebrand Global Solutions are associated (or correlated) with Uniphar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniphar Group PLC has no effect on the direction of Storebrand Global i.e., Storebrand Global and Uniphar Group go up and down completely randomly.

Pair Corralation between Storebrand Global and Uniphar Group

Assuming the 90 days trading horizon Storebrand Global Solutions is expected to generate 0.47 times more return on investment than Uniphar Group. However, Storebrand Global Solutions is 2.13 times less risky than Uniphar Group. It trades about 0.07 of its potential returns per unit of risk. Uniphar Group PLC is currently generating about -0.15 per unit of risk. If you would invest  228,121  in Storebrand Global Solutions on September 2, 2024 and sell it today you would earn a total of  8,103  from holding Storebrand Global Solutions or generate 3.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.97%
Values	Daily Returns

Storebrand Global Solutions  vs.  Uniphar Group PLC

Storebrand Global

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Storebrand Global Solutions are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Storebrand Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Uniphar Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniphar Group PLC 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 Storebrand Global and Uniphar Group

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

The idea behind Storebrand Global Solutions and Uniphar Group 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.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.