Correlation Between Uniper SE and Freddie Mac

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

By analyzing existing cross correlation between Uniper SE and Freddie Mac, you can compare the effects of market volatilities on Uniper SE and Freddie Mac 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 Uniper SE with a short position of Freddie Mac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and Freddie Mac.

Diversification Opportunities for Uniper SE and Freddie Mac

-0.78

Correlation Coefficient

Uniper SE  Freddie Mac

Pay attention - limited upside

The 3 months correlation between Uniper and Freddie is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Freddie Mac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freddie Mac and Uniper SE 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 Uniper SE are associated (or correlated) with Freddie Mac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freddie Mac has no effect on the direction of Uniper SE i.e., Uniper SE and Freddie Mac go up and down completely randomly.

Pair Corralation between Uniper SE and Freddie Mac

Assuming the 90 days trading horizon Uniper SE is expected to generate 0.2 times more return on investment than Freddie Mac. However, Uniper SE is 4.98 times less risky than Freddie Mac. It trades about -0.55 of its potential returns per unit of risk. Freddie Mac is currently generating about -0.16 per unit of risk. If you would invest  4,453  in Uniper SE on September 29, 2024 and sell it today you would lose (576.00) from holding Uniper SE or give up 12.94% of portfolio value over 90 days.

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

Uniper SE  vs.  Freddie Mac

Uniper SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniper SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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.

Freddie Mac

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Freddie Mac are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Freddie Mac unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Uniper SE and Freddie Mac

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

The idea behind Uniper SE and Freddie Mac 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.