Correlation Between UNIQA Insurance and Nokia Oyj
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and Nokia Oyj 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 Nokia Oyj 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 Nokia Oyj, you can compare the effects of market volatilities on UNIQA Insurance and Nokia Oyj 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 Nokia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Nokia Oyj.
Diversification Opportunities for UNIQA Insurance and Nokia Oyj
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UNIQA and Nokia is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Nokia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nokia Oyj 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 Nokia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nokia Oyj has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Nokia Oyj go up and down completely randomly.
Pair Corralation between UNIQA Insurance and Nokia Oyj
Assuming the 90 days trading horizon UNIQA Insurance Group is expected to under-perform the Nokia Oyj. But the stock apears to be less risky and, when comparing its historical volatility, UNIQA Insurance Group is 1.97 times less risky than Nokia Oyj. The stock trades about 0.0 of its potential returns per unit of risk. The Nokia Oyj is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,072 in Nokia Oyj on August 31, 2024 and sell it today you would earn a total of 889.00 from holding Nokia Oyj or generate 9.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIQA Insurance Group vs. Nokia Oyj
Performance |
| Timeline |
| UNIQA Insurance Group |
| Nokia Oyj |
UNIQA Insurance and Nokia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIQA Insurance and Nokia Oyj
The main advantage of trading using opposite UNIQA Insurance and Nokia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, Nokia Oyj 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 Nokia Oyj will offset losses from the drop in Nokia Oyj's long position.| UNIQA Insurance vs. Vienna Insurance Group | UNIQA Insurance vs. JT ARCH INVESTMENTS | UNIQA Insurance vs. Erste Group Bank |
| Nokia Oyj vs. Komercni Banka AS | Nokia Oyj vs. Erste Group Bank | Nokia Oyj vs. UNIQA Insurance Group | Nokia Oyj vs. JT ARCH INVESTMENTS |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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