Correlation Between Alpcot Holding and Unibap AB

Can any of the company-specific risk be diversified away by investing in both Alpcot Holding and Unibap AB 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 Alpcot Holding and Unibap AB into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Alpcot Holding and Unibap AB

-0.43

Correlation Coefficient

Alpcot Holding  Unibap AB

Very good diversification

The 3 months correlation between Alpcot and Unibap is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Alpcot Holding AB and Unibap AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unibap AB and Alpcot Holding 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 Alpcot Holding AB are associated (or correlated) with Unibap AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unibap AB has no effect on the direction of Alpcot Holding i.e., Alpcot Holding and Unibap AB go up and down completely randomly.

Pair Corralation between Alpcot Holding and Unibap AB

Assuming the 90 days trading horizon Alpcot Holding AB is expected to generate 0.85 times more return on investment than Unibap AB. However, Alpcot Holding AB is 1.17 times less risky than Unibap AB. It trades about -0.02 of its potential returns per unit of risk. Unibap AB is currently generating about -0.02 per unit of risk. If you would invest  170.00  in Alpcot Holding AB on September 26, 2024 and sell it today you would lose (110.00) from holding Alpcot Holding AB or give up 64.71% of portfolio value over 90 days.

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

Alpcot Holding AB  vs.  Unibap AB

Alpcot Holding AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alpcot Holding AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Alpcot Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Unibap AB

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unibap AB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward indicators, Unibap AB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpcot Holding and Unibap AB

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

The idea behind Alpcot Holding AB and Unibap AB 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.