Correlation Between Uniphar Group and Greencoat Renewables

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

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

Diversification Opportunities for Uniphar Group and Greencoat Renewables

-0.21

Correlation Coefficient

Uniphar Group  Greencoat Renewables

Very good diversification

The 3 months correlation between Uniphar and Greencoat is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Uniphar Group PLC and Greencoat Renewables PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greencoat Renewables PLC and Uniphar Group 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 Uniphar Group PLC are associated (or correlated) with Greencoat Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greencoat Renewables PLC has no effect on the direction of Uniphar Group i.e., Uniphar Group and Greencoat Renewables go up and down completely randomly.

Pair Corralation between Uniphar Group and Greencoat Renewables

Assuming the 90 days trading horizon Uniphar Group PLC is expected to generate 1.73 times more return on investment than Greencoat Renewables. However, Uniphar Group is 1.73 times more volatile than Greencoat Renewables PLC. It trades about 0.12 of its potential returns per unit of risk. Greencoat Renewables PLC is currently generating about -0.1 per unit of risk. If you would invest  220.00  in Uniphar Group PLC on November 28, 2024 and sell it today you would earn a total of  40.00  from holding Uniphar Group PLC or generate 18.18% return on investment over 90 days.

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

Uniphar Group PLC  vs.  Greencoat Renewables PLC

Uniphar Group PLC

Risk-Adjusted Performance

OK

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

Greencoat Renewables PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Greencoat Renewables PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Uniphar Group and Greencoat Renewables

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

The idea behind Uniphar Group PLC and Greencoat Renewables PLC 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.