Correlation Between Cembra Money and UNIQA Insurance

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

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

Diversification Opportunities for Cembra Money and UNIQA Insurance

0.91

Correlation Coefficient

Cembra Money  UNIQA Insurance

Almost no diversification

The 3 months correlation between Cembra and UNIQA is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Cembra Money Bank 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 Cembra Money 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 Cembra Money Bank 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 Cembra Money i.e., Cembra Money and UNIQA Insurance go up and down completely randomly.

Pair Corralation between Cembra Money and UNIQA Insurance

Assuming the 90 days trading horizon Cembra Money is expected to generate 1.14 times less return on investment than UNIQA Insurance. In addition to that, Cembra Money is 1.51 times more volatile than UNIQA Insurance Group. It trades about 0.21 of its total potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.36 per unit of volatility. If you would invest  716.00  in UNIQA Insurance Group on December 2, 2024 and sell it today you would earn a total of  160.00  from holding UNIQA Insurance Group or generate 22.35% return on investment over 90 days.

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

Cembra Money Bank  vs.  UNIQA Insurance Group

Cembra Money Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cembra Money Bank are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Cembra Money unveiled solid returns over the last few months and may actually be approaching a breakup point.

UNIQA Insurance Group

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, UNIQA Insurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cembra Money and UNIQA Insurance

The main advantage of trading using opposite Cembra Money and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cembra Money 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 Cembra Money Bank 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .