Correlation Between SW Umwelttechnik and UNIQA Insurance
Can any of the company-specific risk be diversified away by investing in both SW Umwelttechnik and UNIQA Insurance 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 SW Umwelttechnik and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SW Umwelttechnik Stoiser and UNIQA Insurance Group, you can compare the effects of market volatilities on SW Umwelttechnik and UNIQA Insurance 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 SW Umwelttechnik with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SW Umwelttechnik and UNIQA Insurance.
Diversification Opportunities for SW Umwelttechnik and UNIQA Insurance
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SWUT and UNIQA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SW Umwelttechnik Stoiser and UNIQA Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQA Insurance Group and SW Umwelttechnik 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 SW Umwelttechnik Stoiser are associated (or correlated) with UNIQA Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIQA Insurance Group has no effect on the direction of SW Umwelttechnik i.e., SW Umwelttechnik and UNIQA Insurance go up and down completely randomly.
Pair Corralation between SW Umwelttechnik and UNIQA Insurance
Assuming the 90 days trading horizon SW Umwelttechnik Stoiser is expected to generate 2.28 times more return on investment than UNIQA Insurance. However, SW Umwelttechnik is 2.28 times more volatile than UNIQA Insurance Group. It trades about 0.03 of its potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.03 per unit of risk. If you would invest 4,400 in SW Umwelttechnik Stoiser on February 23, 2024 and sell it today you would earn a total of 420.00 from holding SW Umwelttechnik Stoiser or generate 9.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 41.83% |
Values | Daily Returns |
SW Umwelttechnik Stoiser vs. UNIQA Insurance Group
Performance |
Timeline |
SW Umwelttechnik Stoiser |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
UNIQA Insurance Group |
SW Umwelttechnik and UNIQA Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SW Umwelttechnik and UNIQA Insurance
The main advantage of trading using opposite SW Umwelttechnik and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SW Umwelttechnik position performs unexpectedly, UNIQA Insurance 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 UNIQA Insurance will offset losses from the drop in UNIQA Insurance's long position.SW Umwelttechnik vs. EVN AG | SW Umwelttechnik vs. Palfinger AG | SW Umwelttechnik vs. Andritz AG | SW Umwelttechnik vs. Polytec Holding AG |
UNIQA Insurance vs. Oesterr Post AG | UNIQA Insurance vs. Raiffeisen Bank International | UNIQA Insurance vs. Voestalpine AG | UNIQA Insurance vs. OMV Aktiengesellschaft |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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