Correlation Between Austrian Traded and UNIQA Insurance
Can any of the company-specific risk be diversified away by investing in both Austrian Traded 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 Austrian Traded and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austrian Traded Index and UNIQA Insurance Group, you can compare the effects of market volatilities on Austrian Traded 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 Austrian Traded with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austrian Traded and UNIQA Insurance.
Diversification Opportunities for Austrian Traded and UNIQA Insurance
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Austrian and UNIQA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Austrian Traded Index 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 Austrian Traded 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 Austrian Traded Index 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 Austrian Traded i.e., Austrian Traded and UNIQA Insurance go up and down completely randomly.
Pair Corralation between Austrian Traded and UNIQA Insurance
Assuming the 90 days trading horizon Austrian Traded Index is expected to generate 0.92 times more return on investment than UNIQA Insurance. However, Austrian Traded Index is 1.09 times less risky than UNIQA Insurance. It trades about 0.04 of its potential returns per unit of risk. UNIQA Insurance Group is currently generating about -0.06 per unit of risk. If you would invest 337,051 in Austrian Traded Index on September 1, 2024 and sell it today you would earn a total of 16,877 from holding Austrian Traded Index or generate 5.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austrian Traded Index vs. UNIQA Insurance Group
Performance |
| Timeline |
Austrian Traded and UNIQA Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Austrian Traded Index
Pair trading matchups for Austrian Traded
UNIQA Insurance Group
Pair trading matchups for UNIQA Insurance
Pair Trading with Austrian Traded and UNIQA Insurance
The main advantage of trading using opposite Austrian Traded and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austrian Traded 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.| Austrian Traded vs. UNIQA Insurance Group | Austrian Traded vs. SBM Offshore NV | Austrian Traded vs. AMAG Austria Metall | Austrian Traded vs. Oberbank AG |
| UNIQA Insurance vs. Oesterr Post AG | UNIQA Insurance vs. Raiffeisen Bank International | UNIQA Insurance vs. Voestalpine AG | UNIQA Insurance vs. OMV Aktiengesellschaft |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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