Correlation Between National Beverage and UNIQA Insurance

Can any of the company-specific risk be diversified away by investing in both National Beverage 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 National Beverage and UNIQA Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between National Beverage Corp and UNIQA Insurance Group, you can compare the effects of market volatilities on National Beverage 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 National Beverage with a short position of UNIQA Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and UNIQA Insurance.

Diversification Opportunities for National Beverage and UNIQA Insurance

-0.73

Correlation Coefficient

National Beverage  UNIQA Insurance

Pay attention - limited upside

The 3 months correlation between National and UNIQA is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp 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 National Beverage 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 National Beverage Corp 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 National Beverage i.e., National Beverage and UNIQA Insurance go up and down completely randomly.

Pair Corralation between National Beverage and UNIQA Insurance

Assuming the 90 days trading horizon National Beverage Corp is expected to under-perform the UNIQA Insurance. But the stock apears to be less risky and, when comparing its historical volatility, National Beverage Corp is 1.05 times less risky than UNIQA Insurance. The stock trades about -0.42 of its potential returns per unit of risk. The UNIQA Insurance Group is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  730.00  in UNIQA Insurance Group on October 11, 2024 and sell it today you would earn a total of  54.00  from holding UNIQA Insurance Group or generate 7.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

National Beverage Corp  vs.  UNIQA Insurance Group

National Beverage Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, National Beverage is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

UNIQA Insurance Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 11 (%) 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.

Pair Trading with National Beverage and UNIQA Insurance

The main advantage of trading using opposite National Beverage and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage 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.

The idea behind National Beverage Corp and UNIQA Insurance 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.