Correlation Between KARO INVEST and UNIQA Insurance
Can any of the company-specific risk be diversified away by investing in both KARO INVEST 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 KARO INVEST and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KARO INVEST as and UNIQA Insurance Group, you can compare the effects of market volatilities on KARO INVEST 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 KARO INVEST with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of KARO INVEST and UNIQA Insurance.
Diversification Opportunities for KARO INVEST and UNIQA Insurance
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KARO and UNIQA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding KARO INVEST as 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 KARO INVEST 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 KARO INVEST as 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 KARO INVEST i.e., KARO INVEST and UNIQA Insurance go up and down completely randomly.
Pair Corralation between KARO INVEST and UNIQA Insurance
Assuming the 90 days trading horizon KARO INVEST as is expected to under-perform the UNIQA Insurance. In addition to that, KARO INVEST is 2.62 times more volatile than UNIQA Insurance Group. It trades about -0.1 of its total potential returns per unit of risk. UNIQA Insurance Group is currently generating about -0.13 per unit of volatility. If you would invest 19,590 in UNIQA Insurance Group on August 30, 2024 and sell it today you would lose (1,090) from holding UNIQA Insurance Group or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.83% |
| Values | Daily Returns |
KARO INVEST as vs. UNIQA Insurance Group
Performance |
| Timeline |
| KARO INVEST as |
| UNIQA Insurance Group |
KARO INVEST and UNIQA Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KARO INVEST and UNIQA Insurance
The main advantage of trading using opposite KARO INVEST and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KARO INVEST 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.| KARO INVEST vs. UNIQA Insurance Group | KARO INVEST vs. Vienna Insurance Group | KARO INVEST vs. JT ARCH INVESTMENTS |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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