Correlation Between Uniper SE and UNIQA Insurance

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

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

Diversification Opportunities for Uniper SE and UNIQA Insurance

0.37

Correlation Coefficient

Uniper SE  UNIQA Insurance

Weak diversification

The 3 months correlation between Uniper and UNIQA is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE 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 Uniper SE 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 Uniper SE 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 Uniper SE i.e., Uniper SE and UNIQA Insurance go up and down completely randomly.

Pair Corralation between Uniper SE and UNIQA Insurance

Assuming the 90 days trading horizon Uniper SE is expected to generate 2.26 times less return on investment than UNIQA Insurance. In addition to that, Uniper SE is 2.31 times more volatile than UNIQA Insurance Group. It trades about 0.08 of its total potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.41 per unit of volatility. If you would invest  769.00  in UNIQA Insurance Group on December 31, 2024 and sell it today you would earn a total of  221.00  from holding UNIQA Insurance Group or generate 28.74% return on investment over 90 days.

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

Uniper SE  vs.  UNIQA Insurance Group

Uniper SE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Uniper SE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Uniper SE may actually be approaching a critical reversion point that can send shares even higher in May 2025.

UNIQA Insurance Group

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 32 (%) 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 Uniper SE and UNIQA Insurance

The main advantage of trading using opposite Uniper SE and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE 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 Uniper SE 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.