Correlation Between Baked Games and UniCredit SpA

Can any of the company-specific risk be diversified away by investing in both Baked Games and UniCredit SpA 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 Baked Games and UniCredit SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Baked Games SA and UniCredit SpA, you can compare the effects of market volatilities on Baked Games and UniCredit SpA 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 Baked Games with a short position of UniCredit SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baked Games and UniCredit SpA.

Diversification Opportunities for Baked Games and UniCredit SpA

-0.71

Correlation Coefficient

Baked Games  UniCredit SpA

Pay attention - limited upside

The 3 months correlation between Baked and UniCredit is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Baked Games SA and UniCredit SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UniCredit SpA and Baked Games 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 Baked Games SA are associated (or correlated) with UniCredit SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UniCredit SpA has no effect on the direction of Baked Games i.e., Baked Games and UniCredit SpA go up and down completely randomly.

Pair Corralation between Baked Games and UniCredit SpA

Assuming the 90 days trading horizon Baked Games SA is expected to generate 1.6 times more return on investment than UniCredit SpA. However, Baked Games is 1.6 times more volatile than UniCredit SpA. It trades about -0.07 of its potential returns per unit of risk. UniCredit SpA is currently generating about -0.32 per unit of risk. If you would invest  332.00  in Baked Games SA on September 5, 2024 and sell it today you would lose (20.00) from holding Baked Games SA or give up 6.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Baked Games SA  vs.  UniCredit SpA

Baked Games SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baked Games SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

UniCredit SpA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UniCredit SpA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, UniCredit SpA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Baked Games and UniCredit SpA

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

The idea behind Baked Games SA and UniCredit SpA 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.