Correlation Between Perdoceo Education and Unipol Gruppo

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

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

Diversification Opportunities for Perdoceo Education and Unipol Gruppo

-0.17

Correlation Coefficient

Perdoceo Education  Unipol Gruppo

Good diversification

The 3 months correlation between Perdoceo and Unipol is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Perdoceo Education 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 Perdoceo Education 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 Perdoceo Education 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 Perdoceo Education i.e., Perdoceo Education and Unipol Gruppo go up and down completely randomly.

Pair Corralation between Perdoceo Education and Unipol Gruppo

Assuming the 90 days horizon Perdoceo Education is expected to under-perform the Unipol Gruppo. In addition to that, Perdoceo Education is 1.21 times more volatile than Unipol Gruppo Finanziario. It trades about -0.09 of its total potential returns per unit of risk. Unipol Gruppo Finanziario is currently generating about 0.3 per unit of volatility. If you would invest  1,164  in Unipol Gruppo Finanziario on December 22, 2024 and sell it today you would earn a total of  358.00  from holding Unipol Gruppo Finanziario or generate 30.76% return on investment over 90 days.

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

Perdoceo Education  vs.  Unipol Gruppo Finanziario

Perdoceo Education

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perdoceo Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Unipol Gruppo Finanziario

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Unipol Gruppo Finanziario are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Unipol Gruppo reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perdoceo Education and Unipol Gruppo

The main advantage of trading using opposite Perdoceo Education and Unipol Gruppo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perdoceo Education 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 Perdoceo Education 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.