Correlation Between GrafTech International and UNIQA Insurance

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

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

Diversification Opportunities for GrafTech International and UNIQA Insurance

-0.5

Correlation Coefficient

GrafTech International  UNIQA Insurance

Very good diversification

The 3 months correlation between GrafTech and UNIQA is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding GrafTech International 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 GrafTech International 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 GrafTech International 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 GrafTech International i.e., GrafTech International and UNIQA Insurance go up and down completely randomly.

Pair Corralation between GrafTech International and UNIQA Insurance

Assuming the 90 days horizon GrafTech International is expected to generate 6.64 times more return on investment than UNIQA Insurance. However, GrafTech International is 6.64 times more volatile than UNIQA Insurance Group. It trades about 0.02 of its potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.09 per unit of risk. If you would invest  157.00  in GrafTech International on September 23, 2024 and sell it today you would lose (2.00) from holding GrafTech International or give up 1.27% of portfolio value over 90 days.

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

GrafTech International  vs.  UNIQA Insurance Group

GrafTech International

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GrafTech International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GrafTech International reported solid returns over the last few months and may actually be approaching a breakup point.

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 GrafTech International and UNIQA Insurance

The main advantage of trading using opposite GrafTech International and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrafTech International 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 GrafTech International 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.