Correlation Between Indivior PLC and UNIQA Insurance

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

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

Diversification Opportunities for Indivior PLC and UNIQA Insurance

0.67

Correlation Coefficient

Indivior PLC  UNIQA Insurance

Poor diversification

The 3 months correlation between Indivior and UNIQA is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Indivior PLC 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 Indivior PLC 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 Indivior PLC 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 Indivior PLC i.e., Indivior PLC and UNIQA Insurance go up and down completely randomly.

Pair Corralation between Indivior PLC and UNIQA Insurance

Assuming the 90 days trading horizon Indivior PLC is expected to generate 2.9 times more return on investment than UNIQA Insurance. However, Indivior PLC is 2.9 times more volatile than UNIQA Insurance Group. It trades about 0.26 of its potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.17 per unit of risk. If you would invest  65,350  in Indivior PLC on October 23, 2024 and sell it today you would earn a total of  33,300  from holding Indivior PLC or generate 50.96% return on investment over 90 days.

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

Indivior PLC  vs.  UNIQA Insurance Group

Indivior PLC

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Indivior PLC are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Indivior PLC unveiled solid returns over the last few months and may actually be approaching a breakup point.

UNIQA Insurance Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, UNIQA Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Indivior PLC and UNIQA Insurance

The main advantage of trading using opposite Indivior PLC and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indivior PLC 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 Indivior PLC 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.