Correlation Between UNIQA Insurance and Investment
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and 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 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 The Investment, you can compare the effects of market volatilities on UNIQA Insurance and 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Investment.
Diversification Opportunities for UNIQA Insurance and Investment
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UNIQA and Investment is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and The Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Investment go up and down completely randomly.
Pair Corralation between UNIQA Insurance and Investment
Assuming the 90 days trading horizon UNIQA Insurance is expected to generate 1.93 times less return on investment than Investment. But when comparing it to its historical volatility, UNIQA Insurance Group is 1.28 times less risky than Investment. It trades about 0.05 of its potential returns per unit of risk. The Investment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 26,700 in The Investment on September 3, 2024 and sell it today you would earn a total of 10,900 from holding The Investment or generate 40.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.59% |
| Values | Daily Returns |
UNIQA Insurance Group vs. The Investment
Performance |
| Timeline |
| UNIQA Insurance Group |
| Investment |
UNIQA Insurance and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and Investment
The main advantage of trading using opposite UNIQA Insurance and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, 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 Investment will offset losses from the drop in Investment'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 |
| Investment vs. CAP LEASE AVIATION | Investment vs. Infrastrutture Wireless Italiane | Investment vs. UNIQA Insurance Group | Investment vs. Verizon Communications |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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