Correlation Between AQ Group and Unibap AB

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

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

Diversification Opportunities for AQ Group and Unibap AB

0.57

Correlation Coefficient

AQ Group  Unibap AB

Very weak diversification

The 3 months correlation between AQ Group and Unibap is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding AQ Group AB and Unibap AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unibap AB and AQ Group 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 AQ Group 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 AQ Group i.e., AQ Group and Unibap AB go up and down completely randomly.

Pair Corralation between AQ Group and Unibap AB

Assuming the 90 days horizon AQ Group AB is expected to under-perform the Unibap AB. But the stock apears to be less risky and, when comparing its historical volatility, AQ Group AB is 1.54 times less risky than Unibap AB. The stock trades about -0.11 of its potential returns per unit of risk. The Unibap AB is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  398.00  in Unibap AB on October 15, 2024 and sell it today you would lose (9.00) from holding Unibap AB or give up 2.26% of portfolio value over 90 days.

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

AQ Group AB  vs.  Unibap AB

AQ Group AB

Risk-Adjusted Performance

6 of 100

OK

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

Unibap AB

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Unibap AB are ranked lower than 13 (%) 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 AQ Group and Unibap AB

The main advantage of trading using opposite AQ Group and Unibap AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AQ Group 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 AQ Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.