Correlation Between Seed Innovations and UNIQA Insurance
Can any of the company-specific risk be diversified away by investing in both Seed Innovations 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 Seed Innovations and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seed Innovations and UNIQA Insurance Group, you can compare the effects of market volatilities on Seed Innovations 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 Seed Innovations with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seed Innovations and UNIQA Insurance.
Diversification Opportunities for Seed Innovations and UNIQA Insurance
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Seed and UNIQA is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Seed Innovations 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 Seed Innovations 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 Seed Innovations 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 Seed Innovations i.e., Seed Innovations and UNIQA Insurance go up and down completely randomly.
Pair Corralation between Seed Innovations and UNIQA Insurance
Assuming the 90 days trading horizon Seed Innovations is expected to generate 4.65 times more return on investment than UNIQA Insurance. However, Seed Innovations is 4.65 times more volatile than UNIQA Insurance Group. It trades about 0.02 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 154.00 in Seed Innovations on October 11, 2024 and sell it today you would earn a total of 11.00 from holding Seed Innovations or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.59% |
| Values | Daily Returns |
Seed Innovations vs. UNIQA Insurance Group
Performance |
| Timeline |
| Seed Innovations |
| UNIQA Insurance Group |
Seed Innovations and UNIQA Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seed Innovations and UNIQA Insurance
The main advantage of trading using opposite Seed Innovations and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seed Innovations 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.| Seed Innovations vs. Coeur Mining | Seed Innovations vs. First Class Metals | Seed Innovations vs. Tata Steel Limited | Seed Innovations vs. Veolia Environnement VE |
| UNIQA Insurance vs. Ebro Foods | UNIQA Insurance vs. Tyson Foods Cl | UNIQA Insurance vs. mobilezone holding AG | UNIQA Insurance vs. Axfood AB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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