Correlation Between Fortescue Metals and UNIQA INSURANCE
Can any of the company-specific risk be diversified away by investing in both Fortescue Metals 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 Fortescue Metals and UNIQA INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortescue Metals Group and UNIQA INSURANCE GR, you can compare the effects of market volatilities on Fortescue Metals 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 Fortescue Metals with a short position of UNIQA INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortescue Metals and UNIQA INSURANCE.
Diversification Opportunities for Fortescue Metals and UNIQA INSURANCE
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fortescue and UNIQA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fortescue Metals Group 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 Fortescue Metals 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 Fortescue Metals Group 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 Fortescue Metals i.e., Fortescue Metals and UNIQA INSURANCE go up and down completely randomly.
Pair Corralation between Fortescue Metals and UNIQA INSURANCE
Assuming the 90 days horizon Fortescue Metals is expected to generate 1.39 times less return on investment than UNIQA INSURANCE. In addition to that, Fortescue Metals is 2.6 times more volatile than UNIQA INSURANCE GR. It trades about 0.02 of its total potential returns per unit of risk. UNIQA INSURANCE GR is currently generating about 0.06 per unit of volatility. If you would invest 666.00 in UNIQA INSURANCE GR on October 27, 2024 and sell it today you would earn a total of 153.00 from holding UNIQA INSURANCE GR or generate 22.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortescue Metals Group vs. UNIQA INSURANCE GR
Performance |
| Timeline |
| Fortescue Metals |
| UNIQA INSURANCE GR |
Fortescue Metals and UNIQA INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortescue Metals and UNIQA INSURANCE
The main advantage of trading using opposite Fortescue Metals and UNIQA INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortescue Metals 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.| Fortescue Metals vs. SPORTING | Fortescue Metals vs. FANDIFI TECHNOLOGY P | Fortescue Metals vs. DICKS Sporting Goods | Fortescue Metals vs. Vishay Intertechnology |
| UNIQA INSURANCE vs. Hyatt Hotels | UNIQA INSURANCE vs. Iridium Communications | UNIQA INSURANCE vs. Xenia Hotels Resorts | UNIQA INSURANCE vs. PPHE HOTEL GROUP |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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