Correlation Between UNIQA Insurance and Raiffeisen Bank

Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and Raiffeisen Bank 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 Raiffeisen Bank 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 Raiffeisen Bank International, you can compare the effects of market volatilities on UNIQA Insurance and Raiffeisen Bank 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 Raiffeisen Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Raiffeisen Bank.

Diversification Opportunities for UNIQA Insurance and Raiffeisen Bank

-0.62

Correlation Coefficient

UNIQA Insurance  Raiffeisen Bank

Excellent diversification

The 3 months correlation between UNIQA and Raiffeisen is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Raiffeisen Bank International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raiffeisen Bank Inte 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 Raiffeisen Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raiffeisen Bank Inte has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Raiffeisen Bank go up and down completely randomly.

Pair Corralation between UNIQA Insurance and Raiffeisen Bank

Assuming the 90 days trading horizon UNIQA Insurance Group is expected to generate 0.23 times more return on investment than Raiffeisen Bank. However, UNIQA Insurance Group is 4.28 times less risky than Raiffeisen Bank. It trades about 0.18 of its potential returns per unit of risk. Raiffeisen Bank International is currently generating about 0.0 per unit of risk. If you would invest  812.00  in UNIQA Insurance Group on February 11, 2024 and sell it today you would earn a total of  13.00  from holding UNIQA Insurance Group or generate 1.6% 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.  Raiffeisen Bank International

UNIQA Insurance Group

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, UNIQA Insurance is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Raiffeisen Bank Inte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raiffeisen Bank International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with UNIQA Insurance and Raiffeisen Bank

The main advantage of trading using opposite UNIQA Insurance and Raiffeisen Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, Raiffeisen Bank 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 Raiffeisen Bank will offset losses from the drop in Raiffeisen Bank's long position.

The idea behind UNIQA Insurance Group and Raiffeisen Bank International 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.

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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.