Correlation Between UniCredit SpA and Poznanska Korporacja

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

By analyzing existing cross correlation between UniCredit SpA and Poznanska Korporacja Budowlana, you can compare the effects of market volatilities on UniCredit SpA and Poznanska Korporacja 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 UniCredit SpA with a short position of Poznanska Korporacja. Check out your portfolio center. Please also check ongoing floating volatility patterns of UniCredit SpA and Poznanska Korporacja.

Diversification Opportunities for UniCredit SpA and Poznanska Korporacja

0.29

Correlation Coefficient

UniCredit SpA  Poznanska Korporacja

Modest diversification

The 3 months correlation between UniCredit and Poznanska is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding UniCredit SpA and Poznanska Korporacja Budowlana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Poznanska Korporacja and UniCredit SpA 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 UniCredit SpA are associated (or correlated) with Poznanska Korporacja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Poznanska Korporacja has no effect on the direction of UniCredit SpA i.e., UniCredit SpA and Poznanska Korporacja go up and down completely randomly.

Pair Corralation between UniCredit SpA and Poznanska Korporacja

Assuming the 90 days trading horizon UniCredit SpA is expected to generate 0.89 times more return on investment than Poznanska Korporacja. However, UniCredit SpA is 1.12 times less risky than Poznanska Korporacja. It trades about -0.02 of its potential returns per unit of risk. Poznanska Korporacja Budowlana is currently generating about -0.04 per unit of risk. If you would invest  16,900  in UniCredit SpA on October 9, 2024 and sell it today you would lose (434.00) from holding UniCredit SpA or give up 2.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

UniCredit SpA  vs.  Poznanska Korporacja Budowlana

UniCredit SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UniCredit SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, UniCredit SpA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Poznanska Korporacja

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Poznanska Korporacja Budowlana has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Poznanska Korporacja is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with UniCredit SpA and Poznanska Korporacja

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

The idea behind UniCredit SpA and Poznanska Korporacja Budowlana 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..