Correlation Between UNIQA Insurance and Aberforth Smaller
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and Aberforth Smaller 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 Aberforth Smaller 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 Aberforth Smaller Companies, you can compare the effects of market volatilities on UNIQA Insurance and Aberforth Smaller 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 Aberforth Smaller. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Aberforth Smaller.
Diversification Opportunities for UNIQA Insurance and Aberforth Smaller
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UNIQA and Aberforth is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Aberforth Smaller Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberforth Smaller 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 Aberforth Smaller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberforth Smaller has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Aberforth Smaller go up and down completely randomly.
Pair Corralation between UNIQA Insurance and Aberforth Smaller
Assuming the 90 days trading horizon UNIQA Insurance Group is expected to generate 0.87 times more return on investment than Aberforth Smaller. However, UNIQA Insurance Group is 1.14 times less risky than Aberforth Smaller. It trades about 0.11 of its potential returns per unit of risk. Aberforth Smaller Companies is currently generating about 0.02 per unit of risk. If you would invest 683.00 in UNIQA Insurance Group on December 11, 2024 and sell it today you would earn a total of 210.00 from holding UNIQA Insurance Group or generate 30.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.07% |
| Values | Daily Returns |
UNIQA Insurance Group vs. Aberforth Smaller Companies
Performance |
| Timeline |
| UNIQA Insurance Group |
| Aberforth Smaller |
UNIQA Insurance and Aberforth Smaller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and Aberforth Smaller
The main advantage of trading using opposite UNIQA Insurance and Aberforth Smaller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, Aberforth Smaller 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 Aberforth Smaller will offset losses from the drop in Aberforth Smaller's long position.| UNIQA Insurance vs. Take Two Interactive Software | ||
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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