Correlation Between UNIQA Insurance and Spotify Technology
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and Spotify Technology 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 Spotify Technology 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 Spotify Technology SA, you can compare the effects of market volatilities on UNIQA Insurance and Spotify Technology 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 Spotify Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Spotify Technology.
Diversification Opportunities for UNIQA Insurance and Spotify Technology
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UNIQA and Spotify is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Spotify Technology SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spotify Technology 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 Spotify Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spotify Technology has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Spotify Technology go up and down completely randomly.
Pair Corralation between UNIQA Insurance and Spotify Technology
Assuming the 90 days trading horizon UNIQA Insurance is expected to generate 8.57 times less return on investment than Spotify Technology. But when comparing it to its historical volatility, UNIQA Insurance Group is 3.05 times less risky than Spotify Technology. It trades about 0.05 of its potential returns per unit of risk. Spotify Technology SA is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11,673 in Spotify Technology SA on November 2, 2024 and sell it today you would earn a total of 41,297 from holding Spotify Technology SA or generate 353.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
UNIQA Insurance Group vs. Spotify Technology SA
Performance |
| Timeline |
| UNIQA Insurance Group |
| Spotify Technology |
UNIQA Insurance and Spotify Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and Spotify Technology
The main advantage of trading using opposite UNIQA Insurance and Spotify Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, Spotify Technology 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 Spotify Technology will offset losses from the drop in Spotify Technology's long position.| UNIQA Insurance vs. First Class Metals | UNIQA Insurance vs. Monster Beverage Corp | UNIQA Insurance vs. Empire Metals Limited | UNIQA Insurance vs. Associated British Foods |
| Spotify Technology vs. URU Metals | Spotify Technology vs. Vietnam Enterprise Investments | Spotify Technology vs. GreenX Metals | Spotify Technology vs. Canadian General Investments |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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