Correlation Between Equitable Holdings and Unipol Gruppo

Can any of the company-specific risk be diversified away by investing in both Equitable Holdings and Unipol Gruppo 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 Equitable Holdings and Unipol Gruppo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Equitable Holdings and Unipol Gruppo Finanziario, you can compare the effects of market volatilities on Equitable Holdings and Unipol Gruppo 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 Equitable Holdings with a short position of Unipol Gruppo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equitable Holdings and Unipol Gruppo.

Diversification Opportunities for Equitable Holdings and Unipol Gruppo

0.63

Correlation Coefficient

Equitable Holdings  Unipol Gruppo

Poor diversification

The 3 months correlation between Equitable and Unipol is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Equitable Holdings and Unipol Gruppo Finanziario in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unipol Gruppo Finanziario and Equitable Holdings 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 Equitable Holdings are associated (or correlated) with Unipol Gruppo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unipol Gruppo Finanziario has no effect on the direction of Equitable Holdings i.e., Equitable Holdings and Unipol Gruppo go up and down completely randomly.

Pair Corralation between Equitable Holdings and Unipol Gruppo

Assuming the 90 days horizon Equitable Holdings is expected to generate 2.83 times less return on investment than Unipol Gruppo. In addition to that, Equitable Holdings is 1.62 times more volatile than Unipol Gruppo Finanziario. It trades about 0.04 of its total potential returns per unit of risk. Unipol Gruppo Finanziario is currently generating about 0.17 per unit of volatility. If you would invest  1,143  in Unipol Gruppo Finanziario on October 4, 2024 and sell it today you would earn a total of  36.00  from holding Unipol Gruppo Finanziario or generate 3.15% return on investment over 90 days.

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

Equitable Holdings  vs.  Unipol Gruppo Finanziario

Equitable Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Equitable Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Equitable Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Unipol Gruppo Finanziario

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Unipol Gruppo Finanziario are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Unipol Gruppo reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Equitable Holdings and Unipol Gruppo

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

The idea behind Equitable Holdings and Unipol Gruppo Finanziario 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.