Correlation Between COPLAND ROAD and UNIQA Insurance

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

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

Diversification Opportunities for COPLAND ROAD and UNIQA Insurance

0.88

Correlation Coefficient

COPLAND ROAD  UNIQA Insurance

Very poor diversification

The 3 months correlation between COPLAND and UNIQA is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding COPLAND ROAD CAPITAL 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 COPLAND ROAD 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 COPLAND ROAD CAPITAL 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 COPLAND ROAD i.e., COPLAND ROAD and UNIQA Insurance go up and down completely randomly.

Pair Corralation between COPLAND ROAD and UNIQA Insurance

Assuming the 90 days horizon COPLAND ROAD CAPITAL is expected to generate 2.68 times more return on investment than UNIQA Insurance. However, COPLAND ROAD is 2.68 times more volatile than UNIQA Insurance Group. It trades about 0.22 of its potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.17 per unit of risk. If you would invest  3,910  in COPLAND ROAD CAPITAL on October 24, 2024 and sell it today you would earn a total of  1,580  from holding COPLAND ROAD CAPITAL or generate 40.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.33%
Values	Daily Returns

COPLAND ROAD CAPITAL  vs.  UNIQA Insurance Group

COPLAND ROAD CAPITAL

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in COPLAND ROAD CAPITAL are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COPLAND ROAD reported solid returns over the last few months and may actually be approaching a breakup point.

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. Despite nearly fragile basic indicators, UNIQA Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with COPLAND ROAD and UNIQA Insurance

The main advantage of trading using opposite COPLAND ROAD and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COPLAND ROAD 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 COPLAND ROAD CAPITAL 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.