Correlation Between UNIQA Insurance and AXA SA
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and AXA SA 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 AXA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNIQA Insurance Group and AXA SA, you can compare the effects of market volatilities on UNIQA Insurance and AXA SA 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 AXA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and AXA SA.
Diversification Opportunities for UNIQA Insurance and AXA SA
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UNIQA and AXA is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and AXA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXA SA 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 Group are associated (or correlated) with AXA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXA SA has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and AXA SA go up and down completely randomly.
Pair Corralation between UNIQA Insurance and AXA SA
Assuming the 90 days trading horizon UNIQA Insurance is expected to generate 4.13 times less return on investment than AXA SA. But when comparing it to its historical volatility, UNIQA Insurance Group is 1.02 times less risky than AXA SA. It trades about 0.01 of its potential returns per unit of risk. AXA SA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,409 in AXA SA on September 2, 2024 and sell it today you would earn a total of 874.00 from holding AXA SA or generate 36.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 54.55% |
| Values | Daily Returns |
UNIQA Insurance Group vs. AXA SA
Performance |
| Timeline |
| UNIQA Insurance Group |
| AXA SA |
UNIQA Insurance and AXA SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and AXA SA
The main advantage of trading using opposite UNIQA Insurance and AXA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, AXA SA 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 AXA SA will offset losses from the drop in AXA SA's long position.The idea behind UNIQA Insurance Group and AXA SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AXA SA vs. WIZZ AIR HLDGUNSPADR4 | AXA SA vs. Air New Zealand | AXA SA vs. ARDAGH METAL PACDL 0001 | AXA SA vs. Aluminum of |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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