Correlation Between H2O Retailing and UNIQA INSURANCE
Can any of the company-specific risk be diversified away by investing in both H2O Retailing 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 H2O Retailing and UNIQA INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and UNIQA INSURANCE GR, you can compare the effects of market volatilities on H2O Retailing 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 H2O Retailing with a short position of UNIQA INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and UNIQA INSURANCE.
Diversification Opportunities for H2O Retailing and UNIQA INSURANCE
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between H2O and UNIQA is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing 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 H2O Retailing 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 H2O Retailing 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 H2O Retailing i.e., H2O Retailing and UNIQA INSURANCE go up and down completely randomly.
Pair Corralation between H2O Retailing and UNIQA INSURANCE
Assuming the 90 days horizon H2O Retailing is expected to generate 3.58 times more return on investment than UNIQA INSURANCE. However, H2O Retailing is 3.58 times more volatile than UNIQA INSURANCE GR. It trades about 0.07 of its potential returns per unit of risk. UNIQA INSURANCE GR is currently generating about 0.04 per unit of risk. If you would invest 671.00 in H2O Retailing on October 16, 2024 and sell it today you would earn a total of 689.00 from holding H2O Retailing or generate 102.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
H2O Retailing vs. UNIQA INSURANCE GR
Performance |
| Timeline |
| H2O Retailing |
| UNIQA INSURANCE GR |
H2O Retailing and UNIQA INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H2O Retailing and UNIQA INSURANCE
The main advantage of trading using opposite H2O Retailing and UNIQA INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing 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.| H2O Retailing vs. GOLD ROAD RES | H2O Retailing vs. Air Transport Services | H2O Retailing vs. Martin Marietta Materials | H2O Retailing vs. SAFEROADS HLDGS |
| UNIQA INSURANCE vs. American Airlines Group | UNIQA INSURANCE vs. COSTCO WHOLESALE CDR | UNIQA INSURANCE vs. JAPAN AIRLINES | UNIQA INSURANCE vs. H2O Retailing |
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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