Correlation Between UNIQA INSURANCE and Erste Group
Can any of the company-specific risk be diversified away by investing in both UNIQA INSURANCE and Erste Group 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 UNIQA INSURANCE and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNIQA INSURANCE GR and Erste Group Bank, you can compare the effects of market volatilities on UNIQA INSURANCE and Erste Group 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 UNIQA INSURANCE with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA INSURANCE and Erste Group.
Diversification Opportunities for UNIQA INSURANCE and Erste Group
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UNIQA and Erste is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA INSURANCE GR and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank and UNIQA INSURANCE 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 UNIQA INSURANCE GR are associated (or correlated) with Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of UNIQA INSURANCE i.e., UNIQA INSURANCE and Erste Group go up and down completely randomly.
Pair Corralation between UNIQA INSURANCE and Erste Group
Assuming the 90 days trading horizon UNIQA INSURANCE GR is expected to under-perform the Erste Group. But the stock apears to be less risky and, when comparing its historical volatility, UNIQA INSURANCE GR is 1.39 times less risky than Erste Group. The stock trades about -0.01 of its potential returns per unit of risk. The Erste Group Bank is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,596 in Erste Group Bank on October 16, 2024 and sell it today you would earn a total of 1,422 from holding Erste Group Bank or generate 30.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIQA INSURANCE GR vs. Erste Group Bank
Performance |
| Timeline |
| UNIQA INSURANCE GR |
| Erste Group Bank |
UNIQA INSURANCE and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA INSURANCE and Erste Group
The main advantage of trading using opposite UNIQA INSURANCE and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA INSURANCE position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.| UNIQA INSURANCE vs. CITY OFFICE REIT | UNIQA INSURANCE vs. DFS Furniture PLC | UNIQA INSURANCE vs. Hisense Home Appliances | UNIQA INSURANCE vs. Gol Intelligent Airlines |
| Erste Group vs. Sch Environnement SA | Erste Group vs. Lifeway Foods | Erste Group vs. EBRO FOODS | Erste Group vs. INDOFOOD AGRI RES |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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