Correlation Between AXA SA and UNIQA Insurance

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

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

Diversification Opportunities for AXA SA and UNIQA Insurance

0.38

Correlation Coefficient

AXA SA  UNIQA Insurance

Weak diversification

The 3 months correlation between AXA and UNIQA is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding AXA SA 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 AXA SA 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 AXA SA 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 AXA SA i.e., AXA SA and UNIQA Insurance go up and down completely randomly.

Pair Corralation between AXA SA and UNIQA Insurance

Assuming the 90 days trading horizon AXA SA is expected to under-perform the UNIQA Insurance. In addition to that, AXA SA is 1.33 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 0.09 per unit of volatility. If you would invest  734.00  in UNIQA Insurance Group on September 23, 2024 and sell it today you would earn a total of  27.00  from holding UNIQA Insurance Group or generate 3.68% return on investment over 90 days.

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

AXA SA  vs.  UNIQA Insurance Group

AXA SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AXA SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

UNIQA Insurance Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, UNIQA Insurance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AXA SA and UNIQA Insurance

The main advantage of trading using opposite AXA SA and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXA SA 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 AXA SA 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.