Correlation Between Union Technologies and Manitou BF

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

Diversification Opportunities for Union Technologies and Manitou BF

-0.07

Correlation Coefficient

Union Technologies  Manitou BF

Good diversification

The 3 months correlation between Union and Manitou is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Union Technologies Informatiqu and Manitou BF SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manitou BF SA 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 Manitou BF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manitou BF SA has no effect on the direction of Union Technologies i.e., Union Technologies and Manitou BF go up and down completely randomly.

Pair Corralation between Union Technologies and Manitou BF

Assuming the 90 days trading horizon Union Technologies Informatique is expected to under-perform the Manitou BF. In addition to that, Union Technologies is 1.77 times more volatile than Manitou BF SA. It trades about -0.03 of its total potential returns per unit of risk. Manitou BF SA is currently generating about -0.03 per unit of volatility. If you would invest  2,412  in Manitou BF SA on September 29, 2024 and sell it today you would lose (744.00) from holding Manitou BF SA or give up 30.85% of portfolio value over 90 days.

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

Union Technologies Informatiqu  vs.  Manitou BF SA

Union Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Union Technologies Informatique has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Union Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Manitou BF SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Manitou BF SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Union Technologies and Manitou BF

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

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