Correlation Between UNIQA Insurance and FC Investment
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and FC Investment 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 FC Investment 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 FC Investment Trust, you can compare the effects of market volatilities on UNIQA Insurance and FC Investment 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 FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and FC Investment.
Diversification Opportunities for UNIQA Insurance and FC Investment
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UNIQA and FCIT is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust 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 FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and FC Investment go up and down completely randomly.
Pair Corralation between UNIQA Insurance and FC Investment
Assuming the 90 days trading horizon UNIQA Insurance is expected to generate 1.24 times less return on investment than FC Investment. But when comparing it to its historical volatility, UNIQA Insurance Group is 1.06 times less risky than FC Investment. It trades about 0.05 of its potential returns per unit of risk. FC Investment Trust is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 95,041 in FC Investment Trust on November 6, 2024 and sell it today you would earn a total of 23,759 from holding FC Investment Trust or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.2% |
| Values | Daily Returns |
UNIQA Insurance Group vs. FC Investment Trust
Performance |
| Timeline |
| UNIQA Insurance Group |
| FC Investment Trust |
UNIQA Insurance and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and FC Investment
The main advantage of trading using opposite UNIQA Insurance and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, FC Investment 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 FC Investment will offset losses from the drop in FC Investment's long position.| UNIQA Insurance vs. Sovereign Metals | UNIQA Insurance vs. bet at home AG | UNIQA Insurance vs. Creo Medical Group | UNIQA Insurance vs. URU Metals |
| FC Investment vs. Kinnevik Investment AB | FC Investment vs. Edinburgh Investment Trust | FC Investment vs. Lowland Investment Co | FC Investment vs. Livermore Investments 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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