Correlation Between UNIQA Insurance and Gamma Communications
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and Gamma Communications 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 Gamma Communications 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 Gamma Communications PLC, you can compare the effects of market volatilities on UNIQA Insurance and Gamma Communications 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 Gamma Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Gamma Communications.
Diversification Opportunities for UNIQA Insurance and Gamma Communications
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UNIQA and Gamma is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Gamma Communications PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications PLC has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Gamma Communications go up and down completely randomly.
Pair Corralation between UNIQA Insurance and Gamma Communications
Assuming the 90 days trading horizon UNIQA Insurance Group is expected to generate 1.0 times more return on investment than Gamma Communications. However, UNIQA Insurance Group is 1.0 times less risky than Gamma Communications. It trades about 0.13 of its potential returns per unit of risk. Gamma Communications PLC is currently generating about 0.01 per unit of risk. If you would invest 718.00 in UNIQA Insurance Group on September 12, 2024 and sell it today you would earn a total of 23.00 from holding UNIQA Insurance Group or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
UNIQA Insurance Group vs. Gamma Communications PLC
Performance |
| Timeline |
| UNIQA Insurance Group |
| Gamma Communications PLC |
UNIQA Insurance and Gamma Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and Gamma Communications
The main advantage of trading using opposite UNIQA Insurance and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.| UNIQA Insurance vs. Prudential Financial | UNIQA Insurance vs. Norman Broadbent Plc | UNIQA Insurance vs. Ross Stores | UNIQA Insurance vs. Cembra Money Bank |
| Gamma Communications vs. Catalyst Media Group | Gamma Communications vs. CATLIN GROUP | Gamma Communications vs. Tamburi Investment Partners | Gamma Communications vs. Magnora ASA |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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