Correlation Between Electromagnetica and One United

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

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

Diversification Opportunities for Electromagnetica and One United

0.33

Correlation Coefficient

Electromagnetica  One United

Weak diversification

The 3 months correlation between Electromagnetica and One is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Electromagnetica SA and One United Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One United Properties and Electromagnetica 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 Electromagnetica SA are associated (or correlated) with One United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One United Properties has no effect on the direction of Electromagnetica i.e., Electromagnetica and One United go up and down completely randomly.

Pair Corralation between Electromagnetica and One United

Assuming the 90 days trading horizon Electromagnetica SA is expected to generate 1.54 times more return on investment than One United. However, Electromagnetica is 1.54 times more volatile than One United Properties. It trades about 0.0 of its potential returns per unit of risk. One United Properties is currently generating about -0.17 per unit of risk. If you would invest  23.00  in Electromagnetica SA on September 27, 2024 and sell it today you would lose (2.00) from holding Electromagnetica SA or give up 8.7% of portfolio value over 90 days.

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

Electromagnetica SA  vs.  One United Properties

Electromagnetica

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Electromagnetica SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Electromagnetica may actually be approaching a critical reversion point that can send shares even higher in January 2025.

One United Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days One United Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Electromagnetica and One United

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

The idea behind Electromagnetica SA and One United Properties 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.