Correlation Between United Internet and Herald Investment

Can any of the company-specific risk be diversified away by investing in both United Internet and Herald Investment 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 Herald Investment 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 Herald Investment Trust, you can compare the effects of market volatilities on United Internet and Herald Investment 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 Herald Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and Herald Investment.

Diversification Opportunities for United Internet and Herald Investment

0.92

Correlation Coefficient

United Internet  Herald Investment

Almost no diversification

The 3 months correlation between United and Herald is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and Herald Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herald Investment Trust 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 Herald Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herald Investment Trust has no effect on the direction of United Internet i.e., United Internet and Herald Investment go up and down completely randomly.

Pair Corralation between United Internet and Herald Investment

Assuming the 90 days trading horizon United Internet AG is expected to generate 2.59 times more return on investment than Herald Investment. However, United Internet is 2.59 times more volatile than Herald Investment Trust. It trades about 0.26 of its potential returns per unit of risk. Herald Investment Trust is currently generating about 0.39 per unit of risk. If you would invest  1,809  in United Internet AG on April 25, 2025 and sell it today you would earn a total of  693.00  from holding United Internet AG or generate 38.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

United Internet AG  vs.  Herald Investment Trust

United Internet AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in United Internet AG are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, United Internet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Herald Investment Trust

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Herald Investment Trust are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Herald Investment exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Internet and Herald Investment

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

The idea behind United Internet AG and Herald Investment Trust 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.