Correlation Between Systemair and UNIQA Insurance
Can any of the company-specific risk be diversified away by investing in both Systemair and UNIQA Insurance 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 Systemair and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Systemair AB and UNIQA Insurance Group, you can compare the effects of market volatilities on Systemair and UNIQA Insurance 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 Systemair with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Systemair and UNIQA Insurance.
Diversification Opportunities for Systemair and UNIQA Insurance
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Systemair and UNIQA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Systemair AB and UNIQA Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQA Insurance Group and Systemair 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 Systemair AB are associated (or correlated) with UNIQA Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIQA Insurance Group has no effect on the direction of Systemair i.e., Systemair and UNIQA Insurance go up and down completely randomly.
Pair Corralation between Systemair and UNIQA Insurance
Assuming the 90 days trading horizon Systemair AB is expected to generate 2.8 times more return on investment than UNIQA Insurance. However, Systemair is 2.8 times more volatile than UNIQA Insurance Group. It trades about 0.04 of its potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.04 per unit of risk. If you would invest 7,879 in Systemair AB on August 25, 2024 and sell it today you would earn a total of 1,201 from holding Systemair AB or generate 15.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.98% |
| Values | Daily Returns |
Systemair AB vs. UNIQA Insurance Group
Performance |
| Timeline |
| Systemair AB |
| UNIQA Insurance Group |
Systemair and UNIQA Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Systemair and UNIQA Insurance
The main advantage of trading using opposite Systemair and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Systemair position performs unexpectedly, UNIQA Insurance 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 UNIQA Insurance will offset losses from the drop in UNIQA Insurance's long position.| Systemair vs. Samsung Electronics Co | Systemair vs. Samsung Electronics Co | Systemair vs. Hyundai Motor | Systemair vs. Toyota Motor Corp |
| UNIQA Insurance vs. Samsung Electronics Co | UNIQA Insurance vs. Samsung Electronics Co | UNIQA Insurance vs. Hyundai Motor | UNIQA Insurance vs. Toyota Motor Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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