Correlation Between EVN AG and UNIQA Insurance

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

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

Diversification Opportunities for EVN AG and UNIQA Insurance

0.81

Correlation Coefficient

EVN AG  UNIQA Insurance

Very poor diversification

The 3 months correlation between EVN and UNIQA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding EVN AG 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 EVN AG 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 EVN AG 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 EVN AG i.e., EVN AG and UNIQA Insurance go up and down completely randomly.

Pair Corralation between EVN AG and UNIQA Insurance

Assuming the 90 days trading horizon EVN AG is expected to under-perform the UNIQA Insurance. In addition to that, EVN AG is 2.0 times more volatile than UNIQA Insurance Group. It trades about -0.31 of its total potential returns per unit of risk. UNIQA Insurance Group is currently generating about -0.03 per unit of volatility. If you would invest  749.00  in UNIQA Insurance Group on September 14, 2024 and sell it today you would lose (10.00) from holding UNIQA Insurance Group or give up 1.34% of portfolio value over 90 days.

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

EVN AG  vs.  UNIQA Insurance Group

EVN AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EVN AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

UNIQA Insurance Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNIQA Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, UNIQA Insurance is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with EVN AG and UNIQA Insurance

The main advantage of trading using opposite EVN AG and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EVN AG 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 EVN AG 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.