Correlation Between UNIQA Insurance and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and Eastman Chemical 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 UNIQA Insurance and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNIQA Insurance Group and Eastman Chemical Co, you can compare the effects of market volatilities on UNIQA Insurance and Eastman Chemical 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 UNIQA Insurance with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Eastman Chemical.
Diversification Opportunities for UNIQA Insurance and Eastman Chemical
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UNIQA and Eastman is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Eastman Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and UNIQA Insurance 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 UNIQA Insurance Group are associated (or correlated) with Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Eastman Chemical go up and down completely randomly.
Pair Corralation between UNIQA Insurance and Eastman Chemical
Assuming the 90 days trading horizon UNIQA Insurance is expected to generate 3.85 times less return on investment than Eastman Chemical. But when comparing it to its historical volatility, UNIQA Insurance Group is 2.24 times less risky than Eastman Chemical. It trades about 0.15 of its potential returns per unit of risk. Eastman Chemical Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 8,897 in Eastman Chemical Co on November 7, 2024 and sell it today you would earn a total of 1,013 from holding Eastman Chemical Co or generate 11.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.48% |
| Values | Daily Returns |
UNIQA Insurance Group vs. Eastman Chemical Co
Performance |
| Timeline |
| UNIQA Insurance Group |
| Eastman Chemical |
UNIQA Insurance and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and Eastman Chemical
The main advantage of trading using opposite UNIQA Insurance and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| UNIQA Insurance vs. Zegona Communications Plc | UNIQA Insurance vs. Bell Food Group | UNIQA Insurance vs. Orient Telecoms | UNIQA Insurance vs. Edita Food Industries |
| Eastman Chemical vs. International Biotechnology Trust | Eastman Chemical vs. Austevoll Seafood ASA | Eastman Chemical vs. Cognizant Technology Solutions | Eastman Chemical vs. Spotify Technology SA |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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