Correlation Between UNIQA INSURANCE and Tower Semiconductor
Can any of the company-specific risk be diversified away by investing in both UNIQA INSURANCE and Tower Semiconductor 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 Tower Semiconductor 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 Tower Semiconductor, you can compare the effects of market volatilities on UNIQA INSURANCE and Tower Semiconductor 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 Tower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA INSURANCE and Tower Semiconductor.
Diversification Opportunities for UNIQA INSURANCE and Tower Semiconductor
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between UNIQA and Tower is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA INSURANCE GR and Tower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Semiconductor 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 Tower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Semiconductor has no effect on the direction of UNIQA INSURANCE i.e., UNIQA INSURANCE and Tower Semiconductor go up and down completely randomly.
Pair Corralation between UNIQA INSURANCE and Tower Semiconductor
Assuming the 90 days trading horizon UNIQA INSURANCE is expected to generate 1.45 times less return on investment than Tower Semiconductor. But when comparing it to its historical volatility, UNIQA INSURANCE GR is 2.37 times less risky than Tower Semiconductor. It trades about 0.46 of its potential returns per unit of risk. Tower Semiconductor is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4,415 in Tower Semiconductor on October 30, 2024 and sell it today you would earn a total of 831.00 from holding Tower Semiconductor or generate 18.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIQA INSURANCE GR vs. Tower Semiconductor
Performance |
| Timeline |
| UNIQA INSURANCE GR |
| Tower Semiconductor |
UNIQA INSURANCE and Tower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA INSURANCE and Tower Semiconductor
The main advantage of trading using opposite UNIQA INSURANCE and Tower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA INSURANCE position performs unexpectedly, Tower Semiconductor 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 Tower Semiconductor will offset losses from the drop in Tower Semiconductor's long position.| UNIQA INSURANCE vs. Adtalem Global Education | UNIQA INSURANCE vs. PLAY2CHILL SA ZY | UNIQA INSURANCE vs. Columbia Sportswear | UNIQA INSURANCE vs. ETFS Coffee ETC |
| Tower Semiconductor vs. PLAYWAY SA ZY 10 | Tower Semiconductor vs. Charter Communications | Tower Semiconductor vs. Playtech plc | Tower Semiconductor vs. Tower One Wireless |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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