Correlation Between Polski Koncern and UNIQA INSURANCE

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

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

Diversification Opportunities for Polski Koncern and UNIQA INSURANCE

-0.34

Correlation Coefficient

Polski Koncern  UNIQA INSURANCE

Very good diversification

The 3 months correlation between Polski and UNIQA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy 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 Polski Koncern 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 Polski Koncern Naftowy 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 Polski Koncern i.e., Polski Koncern and UNIQA INSURANCE go up and down completely randomly.

Pair Corralation between Polski Koncern and UNIQA INSURANCE

Assuming the 90 days trading horizon Polski Koncern is expected to generate 7.29 times less return on investment than UNIQA INSURANCE. In addition to that, Polski Koncern is 1.99 times more volatile than UNIQA INSURANCE GR. It trades about 0.01 of its total potential returns per unit of risk. UNIQA INSURANCE GR is currently generating about 0.15 per unit of volatility. If you would invest  733.00  in UNIQA INSURANCE GR on October 23, 2024 and sell it today you would earn a total of  72.00  from holding UNIQA INSURANCE GR or generate 9.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Polski Koncern Naftowy  vs.  UNIQA INSURANCE GR

Polski Koncern Naftowy

Risk-Adjusted Performance

0 of 100

Very Weak

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

UNIQA INSURANCE GR

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA INSURANCE GR are ranked lower than 12 (%) 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 Polski Koncern and UNIQA INSURANCE

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