Correlation Between Erste Group and UNIQA Insurance
Can any of the company-specific risk be diversified away by investing in both Erste Group 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 Erste Group and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Erste Group Bank and UNIQA Insurance Group, you can compare the effects of market volatilities on Erste Group 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 Erste Group with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Erste Group and UNIQA Insurance.
Diversification Opportunities for Erste Group and UNIQA Insurance
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Erste and UNIQA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Erste Group Bank 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 Erste Group 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 Erste Group Bank 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 Erste Group i.e., Erste Group and UNIQA Insurance go up and down completely randomly.
Pair Corralation between Erste Group and UNIQA Insurance
Assuming the 90 days trading horizon Erste Group Bank is expected to generate 0.81 times more return on investment than UNIQA Insurance. However, Erste Group Bank is 1.23 times less risky than UNIQA Insurance. It trades about 0.31 of its potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.23 per unit of risk. If you would invest 133,500 in Erste Group Bank on November 3, 2024 and sell it today you would earn a total of 16,800 from holding Erste Group Bank or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Erste Group Bank vs. UNIQA Insurance Group
Performance |
| Timeline |
| Erste Group Bank |
| UNIQA Insurance Group |
Erste Group and UNIQA Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Erste Group and UNIQA Insurance
The main advantage of trading using opposite Erste Group and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Erste Group 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.| Erste Group vs. Raiffeisen Bank International | Erste Group vs. JT ARCH INVESTMENTS | Erste Group vs. Komercni Banka AS | Erste Group vs. Moneta Money Bank |
| UNIQA Insurance vs. Vienna Insurance Group | UNIQA Insurance vs. Erste Group Bank | UNIQA Insurance vs. Moneta Money Bank | UNIQA Insurance vs. JT ARCH INVESTMENTS |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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