Correlation Between Exor NV and Unilever PLC

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

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

Diversification Opportunities for Exor NV and Unilever PLC

-0.46

Correlation Coefficient

Exor NV  Unilever PLC

Very good diversification

The 3 months correlation between Exor and Unilever is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Exor NV and Unilever PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unilever PLC and Exor NV 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 Exor NV are associated (or correlated) with Unilever PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unilever PLC has no effect on the direction of Exor NV i.e., Exor NV and Unilever PLC go up and down completely randomly.

Pair Corralation between Exor NV and Unilever PLC

Assuming the 90 days trading horizon Exor NV is expected to generate 1.5 times more return on investment than Unilever PLC. However, Exor NV is 1.5 times more volatile than Unilever PLC. It trades about 0.17 of its potential returns per unit of risk. Unilever PLC is currently generating about -0.17 per unit of risk. If you would invest  7,849  in Exor NV on April 21, 2025 and sell it today you would earn a total of  1,101  from holding Exor NV or generate 14.03% return on investment over 90 days.

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

Exor NV  vs.  Unilever PLC

Exor NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exor NV are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Exor NV unveiled solid returns over the last few months and may actually be approaching a breakup point.

Unilever PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Unilever PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with Exor NV and Unilever PLC

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

The idea behind Exor NV and Unilever 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.