Correlation Between Herald Investment and UNIQA Insurance
Can any of the company-specific risk be diversified away by investing in both Herald Investment 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 Herald Investment and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Herald Investment Trust and UNIQA Insurance Group, you can compare the effects of market volatilities on Herald Investment 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 Herald Investment with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Herald Investment and UNIQA Insurance.
Diversification Opportunities for Herald Investment and UNIQA Insurance
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Herald and UNIQA is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Herald Investment Trust 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 Herald Investment 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 Herald Investment Trust 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 Herald Investment i.e., Herald Investment and UNIQA Insurance go up and down completely randomly.
Pair Corralation between Herald Investment and UNIQA Insurance
Assuming the 90 days trading horizon Herald Investment Trust is expected to generate 1.36 times more return on investment than UNIQA Insurance. However, Herald Investment is 1.36 times more volatile than UNIQA Insurance Group. It trades about 0.05 of its potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.05 per unit of risk. If you would invest 182,800 in Herald Investment Trust on August 26, 2024 and sell it today you would earn a total of 45,200 from holding Herald Investment Trust or generate 24.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.6% |
| Values | Daily Returns |
Herald Investment Trust vs. UNIQA Insurance Group
Performance |
| Timeline |
| Herald Investment Trust |
| UNIQA Insurance Group |
Herald Investment and UNIQA Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Herald Investment and UNIQA Insurance
The main advantage of trading using opposite Herald Investment and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Herald Investment 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.| Herald Investment vs. Monks Investment Trust | Herald Investment vs. Federal Realty Investment | Herald Investment vs. Livermore Investments Group | Herald Investment vs. Lords Grp Trading |
| UNIQA Insurance vs. Samsung Electronics Co | UNIQA Insurance vs. Samsung Electronics Co | UNIQA Insurance vs. Hyundai Motor | UNIQA Insurance vs. Toyota Motor Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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