Correlation Between Uniper SE and Camellia Plc

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

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

Diversification Opportunities for Uniper SE and Camellia Plc

-0.2

Correlation Coefficient

Uniper SE  Camellia Plc

Good diversification

The 3 months correlation between Uniper and Camellia is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and Camellia Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Plc 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 Camellia Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Plc has no effect on the direction of Uniper SE i.e., Uniper SE and Camellia Plc go up and down completely randomly.

Pair Corralation between Uniper SE and Camellia Plc

Assuming the 90 days trading horizon Uniper SE is expected to generate 3.46 times more return on investment than Camellia Plc. However, Uniper SE is 3.46 times more volatile than Camellia Plc. It trades about 0.08 of its potential returns per unit of risk. Camellia Plc is currently generating about -0.07 per unit of risk. If you would invest  3,877  in Uniper SE on December 29, 2024 and sell it today you would earn a total of  398.00  from holding Uniper SE or generate 10.27% return on investment over 90 days.

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

Uniper SE  vs.  Camellia Plc

Uniper SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Uniper SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Uniper SE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Camellia Plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Camellia Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Camellia Plc is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Uniper SE and Camellia Plc

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

The idea behind Uniper SE and Camellia 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.