Correlation Between FinecoBank SpA and UNIQA Insurance
Can any of the company-specific risk be diversified away by investing in both FinecoBank SpA 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 FinecoBank SpA and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FinecoBank SpA and UNIQA Insurance Group, you can compare the effects of market volatilities on FinecoBank SpA 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 FinecoBank SpA with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FinecoBank SpA and UNIQA Insurance.
Diversification Opportunities for FinecoBank SpA and UNIQA Insurance
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FinecoBank and UNIQA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding FinecoBank SpA 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 FinecoBank SpA 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 FinecoBank SpA 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 FinecoBank SpA i.e., FinecoBank SpA and UNIQA Insurance go up and down completely randomly.
Pair Corralation between FinecoBank SpA and UNIQA Insurance
Assuming the 90 days trading horizon FinecoBank SpA is expected to generate 1.2 times less return on investment than UNIQA Insurance. In addition to that, FinecoBank SpA is 2.1 times more volatile than UNIQA Insurance Group. It trades about 0.02 of its total potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.05 per unit of volatility. If you would invest 658.00 in UNIQA Insurance Group on October 9, 2024 and sell it today you would earn a total of 126.00 from holding UNIQA Insurance Group or generate 19.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.59% |
| Values | Daily Returns |
FinecoBank SpA vs. UNIQA Insurance Group
Performance |
| Timeline |
| FinecoBank SpA |
| UNIQA Insurance Group |
FinecoBank SpA and UNIQA Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FinecoBank SpA and UNIQA Insurance
The main advantage of trading using opposite FinecoBank SpA and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FinecoBank SpA 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.| FinecoBank SpA vs. Walmart | FinecoBank SpA vs. BYD Co | FinecoBank SpA vs. Volkswagen AG | FinecoBank SpA vs. Volkswagen AG Non Vtg |
| UNIQA Insurance vs. Vietnam Enterprise Investments | UNIQA Insurance vs. AcadeMedia AB | UNIQA Insurance vs. Bankers Investment Trust | UNIQA Insurance vs. Lindsell Train Investment |
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 Stocks Directory module to find actively traded stocks across global markets.
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