Correlation Between UNIQA Insurance and Johnson Matthey
Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and Johnson Matthey 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 Johnson Matthey 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 Johnson Matthey PLC, you can compare the effects of market volatilities on UNIQA Insurance and Johnson Matthey 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 Johnson Matthey. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Johnson Matthey.
Diversification Opportunities for UNIQA Insurance and Johnson Matthey
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UNIQA and Johnson is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Johnson Matthey PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Matthey PLC 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 Johnson Matthey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Matthey PLC has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Johnson Matthey go up and down completely randomly.
Pair Corralation between UNIQA Insurance and Johnson Matthey
Assuming the 90 days trading horizon UNIQA Insurance Group is expected to generate 0.48 times more return on investment than Johnson Matthey. However, UNIQA Insurance Group is 2.1 times less risky than Johnson Matthey. It trades about 0.05 of its potential returns per unit of risk. Johnson Matthey PLC is currently generating about -0.04 per unit of risk. If you would invest 668.00 in UNIQA Insurance Group on October 22, 2024 and sell it today you would earn a total of 133.00 from holding UNIQA Insurance Group or generate 19.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.59% |
Values | Daily Returns |
UNIQA Insurance Group vs. Johnson Matthey PLC
Performance |
Timeline |
UNIQA Insurance Group |
Johnson Matthey PLC |
UNIQA Insurance and Johnson Matthey Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UNIQA Insurance and Johnson Matthey
The main advantage of trading using opposite UNIQA Insurance and Johnson Matthey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, Johnson Matthey 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 Johnson Matthey will offset losses from the drop in Johnson Matthey's long position.UNIQA Insurance vs. DFS Furniture PLC | UNIQA Insurance vs. Bloomsbury Publishing Plc | UNIQA Insurance vs. Lundin Mining Corp | UNIQA Insurance vs. Adriatic Metals |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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