Correlation Between AS Latvijas and UNIQA INSURANCE
Can any of the company-specific risk be diversified away by investing in both AS Latvijas 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 AS Latvijas and UNIQA INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AS Latvijas balzams and UNIQA INSURANCE GR, you can compare the effects of market volatilities on AS Latvijas 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 AS Latvijas with a short position of UNIQA INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AS Latvijas and UNIQA INSURANCE.
Diversification Opportunities for AS Latvijas and UNIQA INSURANCE
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UM9 and UNIQA is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding AS Latvijas balzams 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 AS Latvijas 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 AS Latvijas balzams 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 AS Latvijas i.e., AS Latvijas and UNIQA INSURANCE go up and down completely randomly.
Pair Corralation between AS Latvijas and UNIQA INSURANCE
Assuming the 90 days trading horizon AS Latvijas balzams is expected to under-perform the UNIQA INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, AS Latvijas balzams is 3.39 times less risky than UNIQA INSURANCE. The stock trades about -0.06 of its potential returns per unit of risk. The UNIQA INSURANCE GR is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 741.00 in UNIQA INSURANCE GR on October 20, 2024 and sell it today you would earn a total of 58.00 from holding UNIQA INSURANCE GR or generate 7.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AS Latvijas balzams vs. UNIQA INSURANCE GR
Performance |
Timeline |
AS Latvijas balzams |
UNIQA INSURANCE GR |
AS Latvijas and UNIQA INSURANCE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AS Latvijas and UNIQA INSURANCE
The main advantage of trading using opposite AS Latvijas and UNIQA INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AS Latvijas 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.AS Latvijas vs. MINCO SILVER | AS Latvijas vs. GALENA MINING LTD | AS Latvijas vs. Sunstone Hotel Investors | AS Latvijas vs. Choice Hotels International |
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Check out your portfolio center.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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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