Correlation Between Aluminumof China and UNIQA INSURANCE
Can any of the company-specific risk be diversified away by investing in both Aluminumof China 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 Aluminumof China and UNIQA INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and UNIQA INSURANCE GR, you can compare the effects of market volatilities on Aluminumof China 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 Aluminumof China with a short position of UNIQA INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and UNIQA INSURANCE.
Diversification Opportunities for Aluminumof China and UNIQA INSURANCE
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aluminumof and UNIQA is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and UNIQA INSURANCE GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQA INSURANCE GR and Aluminumof China 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 Aluminum of 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 GR has no effect on the direction of Aluminumof China i.e., Aluminumof China and UNIQA INSURANCE go up and down completely randomly.
Pair Corralation between Aluminumof China and UNIQA INSURANCE
Assuming the 90 days horizon Aluminum of is expected to generate 4.3 times more return on investment than UNIQA INSURANCE. However, Aluminumof China is 4.3 times more volatile than UNIQA INSURANCE GR. It trades about 0.05 of its potential returns per unit of risk. UNIQA INSURANCE GR is currently generating about 0.05 per unit of risk. If you would invest 31.00 in Aluminum of on October 16, 2024 and sell it today you would earn a total of 26.00 from holding Aluminum of or generate 83.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum of vs. UNIQA INSURANCE GR
Performance |
| Timeline |
| Aluminumof China |
| UNIQA INSURANCE GR |
Aluminumof China and UNIQA INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and UNIQA INSURANCE
The main advantage of trading using opposite Aluminumof China and UNIQA INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China 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.| Aluminumof China vs. CarsalesCom | Aluminumof China vs. Gol Intelligent Airlines | Aluminumof China vs. Commercial Vehicle Group | Aluminumof China vs. CNVISION MEDIA |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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