Correlation Between UNIQA INSURANCE and Casio Computer

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

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

Diversification Opportunities for UNIQA INSURANCE and Casio Computer

-0.26

Correlation Coefficient

UNIQA INSURANCE  Casio Computer

Very good diversification

The 3 months correlation between UNIQA and Casio is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA INSURANCE GR and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd and UNIQA INSURANCE 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 UNIQA INSURANCE GR are associated (or correlated) with Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of UNIQA INSURANCE i.e., UNIQA INSURANCE and Casio Computer go up and down completely randomly.

Pair Corralation between UNIQA INSURANCE and Casio Computer

Assuming the 90 days trading horizon UNIQA INSURANCE GR is expected to generate 0.93 times more return on investment than Casio Computer. However, UNIQA INSURANCE GR is 1.07 times less risky than Casio Computer. It trades about 0.37 of its potential returns per unit of risk. Casio Computer CoLtd is currently generating about -0.06 per unit of risk. If you would invest  767.00  in UNIQA INSURANCE GR on December 21, 2024 and sell it today you would earn a total of  203.00  from holding UNIQA INSURANCE GR or generate 26.47% return on investment over 90 days.

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

UNIQA INSURANCE GR  vs.  Casio Computer CoLtd

UNIQA INSURANCE GR

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA INSURANCE GR are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, UNIQA INSURANCE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Casio Computer CoLtd

Risk-Adjusted Performance

Very Weak

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

Pair Trading with UNIQA INSURANCE and Casio Computer

The main advantage of trading using opposite UNIQA INSURANCE and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA INSURANCE position performs unexpectedly, Casio Computer 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 Casio Computer will offset losses from the drop in Casio Computer's long position.

The idea behind UNIQA INSURANCE GR and Casio Computer CoLtd 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.