Correlation Between Nokia Oyj and UNIQA Insurance
Can any of the company-specific risk be diversified away by investing in both Nokia Oyj 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 Nokia Oyj and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nokia Oyj and UNIQA Insurance Group, you can compare the effects of market volatilities on Nokia Oyj 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 Nokia Oyj with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nokia Oyj and UNIQA Insurance.
Diversification Opportunities for Nokia Oyj and UNIQA Insurance
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nokia and UNIQA is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nokia Oyj 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 Nokia Oyj 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 Nokia Oyj 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 Nokia Oyj i.e., Nokia Oyj and UNIQA Insurance go up and down completely randomly.
Pair Corralation between Nokia Oyj and UNIQA Insurance
Assuming the 90 days trading horizon Nokia Oyj is expected to under-perform the UNIQA Insurance. In addition to that, Nokia Oyj is 1.81 times more volatile than UNIQA Insurance Group. It trades about 0.0 of its total potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.02 per unit of volatility. If you would invest 17,183 in UNIQA Insurance Group on September 3, 2024 and sell it today you would earn a total of 1,317 from holding UNIQA Insurance Group or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nokia Oyj vs. UNIQA Insurance Group
Performance |
| Timeline |
| Nokia Oyj |
| UNIQA Insurance Group |
Nokia Oyj and UNIQA Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nokia Oyj and UNIQA Insurance
The main advantage of trading using opposite Nokia Oyj and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nokia Oyj 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.| Nokia Oyj vs. UNIQA Insurance Group | Nokia Oyj vs. Komercni Banka AS | Nokia Oyj vs. Vienna Insurance Group | Nokia Oyj vs. Moneta Money Bank |
| UNIQA Insurance vs. Raiffeisen Bank International | UNIQA Insurance vs. Vienna Insurance Group | UNIQA Insurance vs. Komercni Banka AS | UNIQA Insurance vs. Moneta Money Bank |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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