Correlation Between UNIQA Insurance and Flow Traders
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and Flow Traders 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 Flow Traders 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 Flow Traders NV, you can compare the effects of market volatilities on UNIQA Insurance and Flow Traders 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 Flow Traders. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Flow Traders.
Diversification Opportunities for UNIQA Insurance and Flow Traders
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UNIQA and Flow is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Flow Traders NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Traders NV 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 Flow Traders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Traders NV has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Flow Traders go up and down completely randomly.
Pair Corralation between UNIQA Insurance and Flow Traders
Assuming the 90 days trading horizon UNIQA Insurance is expected to generate 1.58 times less return on investment than Flow Traders. But when comparing it to its historical volatility, UNIQA Insurance Group is 1.92 times less risky than Flow Traders. It trades about 0.37 of its potential returns per unit of risk. Flow Traders NV is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,110 in Flow Traders NV on October 11, 2024 and sell it today you would earn a total of 248.00 from holding Flow Traders NV or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIQA Insurance Group vs. Flow Traders NV
Performance |
| Timeline |
| UNIQA Insurance Group |
| Flow Traders NV |
UNIQA Insurance and Flow Traders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and Flow Traders
The main advantage of trading using opposite UNIQA Insurance and Flow Traders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, Flow Traders 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 Flow Traders will offset losses from the drop in Flow Traders' long position.| UNIQA Insurance vs. Ebro Foods | UNIQA Insurance vs. Tyson Foods Cl | UNIQA Insurance vs. mobilezone holding AG | UNIQA Insurance vs. Axfood AB |
| Flow Traders vs. UNIQA Insurance Group | Flow Traders vs. Ecclesiastical Insurance Office | Flow Traders vs. Centaur Media | Flow Traders vs. Vienna Insurance Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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