Correlation Between Advanced Medical and UNIQA Insurance

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

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

Diversification Opportunities for Advanced Medical and UNIQA Insurance

0.2

Correlation Coefficient

Advanced Medical  UNIQA Insurance

Modest diversification

The 3 months correlation between Advanced and UNIQA is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions 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 Advanced Medical 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 Advanced Medical Solutions 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 Advanced Medical i.e., Advanced Medical and UNIQA Insurance go up and down completely randomly.

Pair Corralation between Advanced Medical and UNIQA Insurance

Assuming the 90 days trading horizon Advanced Medical is expected to generate 48.38 times less return on investment than UNIQA Insurance. In addition to that, Advanced Medical is 2.23 times more volatile than UNIQA Insurance Group. It trades about 0.0 of its total potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.33 per unit of volatility. If you would invest  765.00  in UNIQA Insurance Group on December 21, 2024 and sell it today you would earn a total of  201.00  from holding UNIQA Insurance Group or generate 26.27% return on investment over 90 days.

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

Advanced Medical Solutions  vs.  UNIQA Insurance Group

Advanced Medical Sol

Risk-Adjusted Performance

Weak

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

UNIQA Insurance Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, UNIQA Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advanced Medical and UNIQA Insurance

The main advantage of trading using opposite Advanced Medical and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical 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 Advanced Medical Solutions 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..