Correlation Between Tower Semiconductor and UNIQA INSURANCE
Can any of the company-specific risk be diversified away by investing in both Tower Semiconductor 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 Tower Semiconductor and UNIQA INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tower Semiconductor and UNIQA INSURANCE GR, you can compare the effects of market volatilities on Tower Semiconductor 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 Tower Semiconductor with a short position of UNIQA INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tower Semiconductor and UNIQA INSURANCE.
Diversification Opportunities for Tower Semiconductor and UNIQA INSURANCE
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tower and UNIQA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tower Semiconductor 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 Tower Semiconductor 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 Tower Semiconductor 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 Tower Semiconductor i.e., Tower Semiconductor and UNIQA INSURANCE go up and down completely randomly.
Pair Corralation between Tower Semiconductor and UNIQA INSURANCE
Assuming the 90 days horizon Tower Semiconductor is expected to generate 3.46 times more return on investment than UNIQA INSURANCE. However, Tower Semiconductor is 3.46 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 0.06 per unit of risk. If you would invest 2,821 in Tower Semiconductor on October 16, 2024 and sell it today you would earn a total of 2,124 from holding Tower Semiconductor or generate 75.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tower Semiconductor vs. UNIQA INSURANCE GR
Performance |
| Timeline |
| Tower Semiconductor |
| UNIQA INSURANCE GR |
Tower Semiconductor and UNIQA INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tower Semiconductor and UNIQA INSURANCE
The main advantage of trading using opposite Tower Semiconductor and UNIQA INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tower Semiconductor 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.| Tower Semiconductor vs. MOLSON RS BEVERAGE | Tower Semiconductor vs. ZhongAn Online P | Tower Semiconductor vs. Astral Foods Limited | Tower Semiconductor vs. SALESFORCE INC CDR |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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