Correlation Between Chesapeake Utilities and UNIQA INSURANCE

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

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

Diversification Opportunities for Chesapeake Utilities and UNIQA INSURANCE

-0.27

Correlation Coefficient

Chesapeake Utilities  UNIQA INSURANCE

Very good diversification

The 3 months correlation between Chesapeake and UNIQA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and UNIQA INSURANCE GR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQA INSURANCE GR and Chesapeake Utilities 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 Chesapeake Utilities 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 GR has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and UNIQA INSURANCE go up and down completely randomly.

Pair Corralation between Chesapeake Utilities and UNIQA INSURANCE

Assuming the 90 days horizon Chesapeake Utilities is expected to generate 182.68 times less return on investment than UNIQA INSURANCE. In addition to that, Chesapeake Utilities is 1.1 times more volatile than UNIQA INSURANCE GR. It trades about 0.0 of its total potential returns per unit of risk. UNIQA INSURANCE GR is currently generating about 0.31 per unit of volatility. If you would invest  719.00  in UNIQA INSURANCE GR on December 6, 2024 and sell it today you would earn a total of  160.00  from holding UNIQA INSURANCE GR or generate 22.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Chesapeake Utilities  vs.  UNIQA INSURANCE GR

Chesapeake Utilities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chesapeake Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Chesapeake Utilities is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

UNIQA INSURANCE GR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA INSURANCE GR are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, UNIQA INSURANCE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chesapeake Utilities and UNIQA INSURANCE

The main advantage of trading using opposite Chesapeake Utilities and UNIQA INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities 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 Chesapeake Utilities and UNIQA INSURANCE GR 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.