Correlation Between UNIQA Insurance and Aurora Investment

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

Diversification Opportunities for UNIQA Insurance and Aurora Investment

-0.56

Correlation Coefficient

UNIQA Insurance  Aurora Investment

Excellent diversification

The 3 months correlation between UNIQA and Aurora is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Aurora Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Investment Trust 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 Aurora Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Investment Trust has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Aurora Investment go up and down completely randomly.

Pair Corralation between UNIQA Insurance and Aurora Investment

Assuming the 90 days trading horizon UNIQA Insurance Group is expected to generate 0.73 times more return on investment than Aurora Investment. However, UNIQA Insurance Group is 1.37 times less risky than Aurora Investment. It trades about 0.16 of its potential returns per unit of risk. Aurora Investment Trust is currently generating about -0.11 per unit of risk. If you would invest  732.00  in UNIQA Insurance Group on October 22, 2024 and sell it today you would earn a total of  69.00  from holding UNIQA Insurance Group or generate 9.43% 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.  Aurora Investment Trust

UNIQA Insurance Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, UNIQA Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aurora Investment Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aurora Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with UNIQA Insurance and Aurora Investment

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

The idea behind UNIQA Insurance Group and Aurora Investment Trust 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.