Correlation Between UNIQA Insurance and Universal Music
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and Universal Music 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 Universal Music 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 Universal Music Group, you can compare the effects of market volatilities on UNIQA Insurance and Universal Music 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 Universal Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Universal Music.
Diversification Opportunities for UNIQA Insurance and Universal Music
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between UNIQA and Universal is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Universal Music Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Music Group 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 Universal Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Music Group has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Universal Music go up and down completely randomly.
Pair Corralation between UNIQA Insurance and Universal Music
Assuming the 90 days trading horizon UNIQA Insurance Group is expected to generate 0.37 times more return on investment than Universal Music. However, UNIQA Insurance Group is 2.72 times less risky than Universal Music. It trades about 0.05 of its potential returns per unit of risk. Universal Music Group is currently generating about 0.01 per unit of risk. If you would invest 605.00 in UNIQA Insurance Group on September 3, 2024 and sell it today you would earn a total of 115.00 from holding UNIQA Insurance Group or generate 19.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.42% |
| Values | Daily Returns |
UNIQA Insurance Group vs. Universal Music Group
Performance |
| Timeline |
| UNIQA Insurance Group |
| Universal Music Group |
UNIQA Insurance and Universal Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and Universal Music
The main advantage of trading using opposite UNIQA Insurance and Universal Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, Universal Music 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 Universal Music will offset losses from the drop in Universal Music's long position.| UNIQA Insurance vs. Panther Metals PLC | UNIQA Insurance vs. McEwen Mining | UNIQA Insurance vs. Molson Coors Beverage | UNIQA Insurance vs. Central Asia Metals |
| Universal Music vs. Catalyst Media Group | Universal Music vs. CATLIN GROUP | Universal Music vs. RTW Venture Fund | Universal Music vs. Secure Property Development |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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