Correlation Between Addtech and Uniper SE

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

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

Diversification Opportunities for Addtech and Uniper SE

-0.17

Correlation Coefficient

Addtech  Uniper SE

Good diversification

The 3 months correlation between Addtech and Uniper is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Addtech and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and Addtech 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 Addtech are associated (or correlated) with Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Addtech i.e., Addtech and Uniper SE go up and down completely randomly.

Pair Corralation between Addtech and Uniper SE

Assuming the 90 days trading horizon Addtech is expected to generate 0.88 times more return on investment than Uniper SE. However, Addtech is 1.13 times less risky than Uniper SE. It trades about 0.09 of its potential returns per unit of risk. Uniper SE is currently generating about -0.04 per unit of risk. If you would invest  24,192  in Addtech on September 3, 2024 and sell it today you would earn a total of  6,228  from holding Addtech or generate 25.74% return on investment over 90 days.

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

Addtech  vs.  Uniper SE

Addtech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Addtech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Uniper SE

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Uniper SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Uniper SE may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Addtech and Uniper SE

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

The idea behind Addtech and Uniper SE 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.