Correlation Between United Internet and REVO INSURANCE

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Can any of the company-specific risk be diversified away by investing in both United Internet and REVO INSURANCE 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 United Internet and REVO INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Internet AG and REVO INSURANCE SPA, you can compare the effects of market volatilities on United Internet and REVO INSURANCE 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 United Internet with a short position of REVO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and REVO INSURANCE.

Diversification Opportunities for United Internet and REVO INSURANCE

UnitedREVODiversified AwayUnitedREVODiversified Away100%
-0.76
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between United and REVO is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and REVO INSURANCE SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVO INSURANCE SPA and United Internet 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 United Internet AG are associated (or correlated) with REVO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVO INSURANCE SPA has no effect on the direction of United Internet i.e., United Internet and REVO INSURANCE go up and down completely randomly.

Pair Corralation between United Internet and REVO INSURANCE

Assuming the 90 days trading horizon United Internet AG is expected to under-perform the REVO INSURANCE. In addition to that, United Internet is 1.98 times more volatile than REVO INSURANCE SPA. It trades about -0.12 of its total potential returns per unit of risk. REVO INSURANCE SPA is currently generating about 0.36 per unit of volatility. If you would invest  906.00  in REVO INSURANCE SPA on September 20, 2024 and sell it today you would earn a total of  284.00  from holding REVO INSURANCE SPA or generate 31.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

United Internet AG  vs.  REVO INSURANCE SPA

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -1001020
JavaScript chart by amCharts 3.21.15UTDI H0O
       Timeline  
United Internet AG 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days United Internet AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1617181920
REVO INSURANCE SPA 

Risk-Adjusted Performance

28 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in REVO INSURANCE SPA are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, REVO INSURANCE reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec99.51010.51111.512

United Internet and REVO INSURANCE Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.94-2.95-1.96-0.970.01480.891.782.673.56 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15UTDI H0O
       Returns  

Pair Trading with United Internet and REVO INSURANCE

The main advantage of trading using opposite United Internet and REVO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, REVO INSURANCE 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 REVO INSURANCE will offset losses from the drop in REVO INSURANCE's long position.
The idea behind United Internet AG and REVO INSURANCE SPA 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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