Correlation Between UNITED INTERNET and SmarTone Telecommunicatio

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

By analyzing existing cross correlation between UNITED INTERNET N and SmarTone Telecommunications Holdings, you can compare the effects of market volatilities on UNITED INTERNET and SmarTone Telecommunicatio 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 SmarTone Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED INTERNET and SmarTone Telecommunicatio.

Diversification Opportunities for UNITED INTERNET and SmarTone Telecommunicatio

0.39

Correlation Coefficient

UNITED INTERNET  SmarTone Telecommunicatio

Weak diversification

The 3 months correlation between UNITED and SmarTone is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding UNITED INTERNET N and SmarTone Telecommunications Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmarTone Telecommunicatio 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 N are associated (or correlated) with SmarTone Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmarTone Telecommunicatio has no effect on the direction of UNITED INTERNET i.e., UNITED INTERNET and SmarTone Telecommunicatio go up and down completely randomly.

Pair Corralation between UNITED INTERNET and SmarTone Telecommunicatio

Assuming the 90 days trading horizon UNITED INTERNET N is expected to generate 1.72 times more return on investment than SmarTone Telecommunicatio. However, UNITED INTERNET is 1.72 times more volatile than SmarTone Telecommunications Holdings. It trades about 0.24 of its potential returns per unit of risk. SmarTone Telecommunications Holdings is currently generating about 0.08 per unit of risk. If you would invest  1,760  in UNITED INTERNET N on April 24, 2025 and sell it today you would earn a total of  736.00  from holding UNITED INTERNET N or generate 41.82% return on investment over 90 days.

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

UNITED INTERNET N  vs.  SmarTone Telecommunications Ho

UNITED INTERNET N

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UNITED INTERNET N are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, UNITED INTERNET unveiled solid returns over the last few months and may actually be approaching a breakup point.

SmarTone Telecommunicatio

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SmarTone Telecommunications Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SmarTone Telecommunicatio may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with UNITED INTERNET and SmarTone Telecommunicatio

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

The idea behind UNITED INTERNET N and SmarTone Telecommunications Holdings 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.

Check out your portfolio center.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.