Correlation Between Union Technologies and Aures Technologies

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

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

Diversification Opportunities for Union Technologies and Aures Technologies

0.21

Correlation Coefficient

Union Technologies  Aures Technologies

Modest diversification

The 3 months correlation between Union and Aures is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Union Technologies Informatiqu and Aures Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aures Technologies and Union Technologies 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 Union Technologies Informatique are associated (or correlated) with Aures Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aures Technologies has no effect on the direction of Union Technologies i.e., Union Technologies and Aures Technologies go up and down completely randomly.

Pair Corralation between Union Technologies and Aures Technologies

Assuming the 90 days trading horizon Union Technologies Informatique is expected to generate 41.94 times more return on investment than Aures Technologies. However, Union Technologies is 41.94 times more volatile than Aures Technologies SA. It trades about 0.06 of its potential returns per unit of risk. Aures Technologies SA is currently generating about 0.04 per unit of risk. If you would invest  20.00  in Union Technologies Informatique on December 21, 2024 and sell it today you would earn a total of  2.00  from holding Union Technologies Informatique or generate 10.0% return on investment over 90 days.

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

Union Technologies Informatiqu  vs.  Aures Technologies SA

Union Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Union Technologies Informatique are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Union Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Aures Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aures Technologies SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Aures Technologies is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Union Technologies and Aures Technologies

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

The idea behind Union Technologies Informatique and Aures Technologies SA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.