Correlation Between UNIQA Insurance and GOODYEAR T
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and GOODYEAR T 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 GOODYEAR T 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 GOODYEAR T RUBBER, you can compare the effects of market volatilities on UNIQA Insurance and GOODYEAR T 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 GOODYEAR T. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and GOODYEAR T.
Diversification Opportunities for UNIQA Insurance and GOODYEAR T
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UNIQA and GOODYEAR is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and GOODYEAR T RUBBER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODYEAR T RUBBER 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 GOODYEAR T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODYEAR T RUBBER has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and GOODYEAR T go up and down completely randomly.
Pair Corralation between UNIQA Insurance and GOODYEAR T
Assuming the 90 days trading horizon UNIQA Insurance is expected to generate 23.55 times less return on investment than GOODYEAR T. But when comparing it to its historical volatility, UNIQA Insurance Group is 4.94 times less risky than GOODYEAR T. It trades about 0.09 of its potential returns per unit of risk. GOODYEAR T RUBBER is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 756.00 in GOODYEAR T RUBBER on September 3, 2024 and sell it today you would earn a total of 258.00 from holding GOODYEAR T RUBBER or generate 34.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIQA Insurance Group vs. GOODYEAR T RUBBER
Performance |
| Timeline |
| UNIQA Insurance Group |
| GOODYEAR T RUBBER |
UNIQA Insurance and GOODYEAR T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and GOODYEAR T
The main advantage of trading using opposite UNIQA Insurance and GOODYEAR T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, GOODYEAR T 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 GOODYEAR T will offset losses from the drop in GOODYEAR T's long position.| UNIQA Insurance vs. H FARM SPA | UNIQA Insurance vs. Soken Chemical Engineering | UNIQA Insurance vs. PTT Global Chemical | UNIQA Insurance vs. TITAN MACHINERY |
| GOODYEAR T vs. TOTAL GABON | GOODYEAR T vs. Walgreens Boots Alliance | GOODYEAR T vs. Peak Resources Limited |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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