Correlation Between UNIQA Insurance and Revolution Beauty

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

Diversification Opportunities for UNIQA Insurance and Revolution Beauty

0.64

Correlation Coefficient

UNIQA Insurance  Revolution Beauty

Poor diversification

The 3 months correlation between UNIQA and Revolution is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Revolution Beauty Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revolution Beauty 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 Revolution Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revolution Beauty has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Revolution Beauty go up and down completely randomly.

Pair Corralation between UNIQA Insurance and Revolution Beauty

Assuming the 90 days trading horizon UNIQA Insurance Group is expected to generate 0.15 times more return on investment than Revolution Beauty. However, UNIQA Insurance Group is 6.68 times less risky than Revolution Beauty. It trades about 0.17 of its potential returns per unit of risk. Revolution Beauty Group is currently generating about 0.01 per unit of risk. If you would invest  734.00  in UNIQA Insurance Group on October 23, 2024 and sell it today you would earn a total of  71.00  from holding UNIQA Insurance Group or generate 9.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

UNIQA Insurance Group  vs.  Revolution Beauty Group

UNIQA Insurance Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, UNIQA Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Revolution Beauty

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Revolution Beauty Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Revolution Beauty is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with UNIQA Insurance and Revolution Beauty

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

The idea behind UNIQA Insurance Group and Revolution Beauty Group 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.