Correlation Between UNIQA Insurance and Derwent London
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and Derwent London 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 Derwent London 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 Derwent London PLC, you can compare the effects of market volatilities on UNIQA Insurance and Derwent London 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 Derwent London. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Derwent London.
Diversification Opportunities for UNIQA Insurance and Derwent London
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UNIQA and Derwent is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Derwent London PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derwent London PLC 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 Derwent London. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derwent London PLC has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Derwent London go up and down completely randomly.
Pair Corralation between UNIQA Insurance and Derwent London
Assuming the 90 days trading horizon UNIQA Insurance Group is expected to generate 0.44 times more return on investment than Derwent London. However, UNIQA Insurance Group is 2.26 times less risky than Derwent London. It trades about 0.05 of its potential returns per unit of risk. Derwent London PLC is currently generating about -0.02 per unit of risk. If you would invest 653.00 in UNIQA Insurance Group on October 7, 2024 and sell it today you would earn a total of 128.00 from holding UNIQA Insurance Group or generate 19.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.6% |
| Values | Daily Returns |
UNIQA Insurance Group vs. Derwent London PLC
Performance |
| Timeline |
| UNIQA Insurance Group |
| Derwent London PLC |
UNIQA Insurance and Derwent London Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and Derwent London
The main advantage of trading using opposite UNIQA Insurance and Derwent London positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, Derwent London 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 Derwent London will offset losses from the drop in Derwent London's long position.| UNIQA Insurance vs. Bankers Investment Trust | UNIQA Insurance vs. Raymond James Financial | UNIQA Insurance vs. FinecoBank SpA | UNIQA Insurance vs. Gaztransport et Technigaz |
| Derwent London vs. Monster Beverage Corp | Derwent London vs. Cars Inc | Derwent London vs. Ebro Foods | Derwent London vs. GlobalData PLC |
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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