Correlation Between Unilever PLC and ZINZINO AB

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

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

Diversification Opportunities for Unilever PLC and ZINZINO AB

0.05

Correlation Coefficient

Unilever PLC  ZINZINO AB

Significant diversification

The 3 months correlation between Unilever and ZINZINO is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Unilever PLC and ZINZINO AB B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZINZINO AB B and Unilever PLC 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 Unilever PLC are associated (or correlated) with ZINZINO AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZINZINO AB B has no effect on the direction of Unilever PLC i.e., Unilever PLC and ZINZINO AB go up and down completely randomly.

Pair Corralation between Unilever PLC and ZINZINO AB

Assuming the 90 days trading horizon Unilever PLC is expected to generate 10.88 times less return on investment than ZINZINO AB. But when comparing it to its historical volatility, Unilever PLC is 4.31 times less risky than ZINZINO AB. It trades about 0.04 of its potential returns per unit of risk. ZINZINO AB B is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  127.00  in ZINZINO AB B on October 11, 2024 and sell it today you would earn a total of  726.00  from holding ZINZINO AB B or generate 571.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Unilever PLC  vs.  ZINZINO AB B

Unilever PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unilever PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ZINZINO AB B

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ZINZINO AB B are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ZINZINO AB may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Unilever PLC and ZINZINO AB

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

The idea behind Unilever PLC and ZINZINO AB B 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.