Correlation Between Umicore SA and Umicore SA

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

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

Diversification Opportunities for Umicore SA and Umicore SA

0.74

Correlation Coefficient

Umicore SA  Umicore SA

Poor diversification

The 3 months correlation between Umicore and Umicore is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Umicore SA and Umicore SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Umicore SA ADR and Umicore SA 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 Umicore SA are associated (or correlated) with Umicore SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Umicore SA ADR has no effect on the direction of Umicore SA i.e., Umicore SA and Umicore SA go up and down completely randomly.

Pair Corralation between Umicore SA and Umicore SA

Assuming the 90 days horizon Umicore SA is expected to generate 1.22 times more return on investment than Umicore SA. However, Umicore SA is 1.22 times more volatile than Umicore SA ADR. It trades about 0.04 of its potential returns per unit of risk. Umicore SA ADR is currently generating about 0.04 per unit of risk. If you would invest  1,037  in Umicore SA on December 30, 2024 and sell it today you would earn a total of  61.00  from holding Umicore SA or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.77%
Values	Daily Returns

Umicore SA  vs.  Umicore SA ADR

Umicore SA

Risk-Adjusted Performance

Insignificant

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

Umicore SA ADR

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Umicore SA and Umicore SA

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

The idea behind Umicore SA and Umicore SA ADR 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 Commodity Directory module to find actively traded commodities issued by global exchanges.