Correlation Between Union Technologies and Bilendi

Can any of the company-specific risk be diversified away by investing in both Union Technologies and Bilendi 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 Bilendi 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 Bilendi, you can compare the effects of market volatilities on Union Technologies and Bilendi 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 Bilendi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Technologies and Bilendi.

Diversification Opportunities for Union Technologies and Bilendi

-0.54

Correlation Coefficient

Union Technologies  Bilendi

Excellent diversification

The 3 months correlation between Union and Bilendi is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Union Technologies Informatiqu and Bilendi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilendi 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 Bilendi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilendi has no effect on the direction of Union Technologies i.e., Union Technologies and Bilendi go up and down completely randomly.

Pair Corralation between Union Technologies and Bilendi

Assuming the 90 days trading horizon Union Technologies Informatique is expected to under-perform the Bilendi. In addition to that, Union Technologies is 1.86 times more volatile than Bilendi. It trades about -0.04 of its total potential returns per unit of risk. Bilendi is currently generating about 0.06 per unit of volatility. If you would invest  1,320  in Bilendi on October 5, 2024 and sell it today you would earn a total of  570.00  from holding Bilendi or generate 43.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.68%
Values	Daily Returns

Union Technologies Informatiqu  vs.  Bilendi

Union Technologies

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Union Technologies Informatique are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Union Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bilendi

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bilendi are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Bilendi reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Union Technologies and Bilendi

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

The idea behind Union Technologies Informatique and Bilendi 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.