Correlation Between UNIQA INSURANCE and HANOVER INSURANCE

Can any of the company-specific risk be diversified away by investing in both UNIQA INSURANCE and HANOVER 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 UNIQA INSURANCE and HANOVER INSURANCE 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 HANOVER INSURANCE, you can compare the effects of market volatilities on UNIQA INSURANCE and HANOVER 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 UNIQA INSURANCE with a short position of HANOVER INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA INSURANCE and HANOVER INSURANCE.

Diversification Opportunities for UNIQA INSURANCE and HANOVER INSURANCE

-0.17

Correlation Coefficient

UNIQA INSURANCE  HANOVER INSURANCE

Good diversification

The 3 months correlation between UNIQA and HANOVER is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA INSURANCE GR and HANOVER INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANOVER INSURANCE 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 HANOVER INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANOVER INSURANCE has no effect on the direction of UNIQA INSURANCE i.e., UNIQA INSURANCE and HANOVER INSURANCE go up and down completely randomly.

Pair Corralation between UNIQA INSURANCE and HANOVER INSURANCE

Assuming the 90 days trading horizon UNIQA INSURANCE is expected to generate 1.4 times less return on investment than HANOVER INSURANCE. But when comparing it to its historical volatility, UNIQA INSURANCE GR is 1.75 times less risky than HANOVER INSURANCE. It trades about 0.04 of its potential returns per unit of risk. HANOVER INSURANCE is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  12,655  in HANOVER INSURANCE on October 6, 2024 and sell it today you would earn a total of  2,045  from holding HANOVER INSURANCE or generate 16.16% 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.  HANOVER INSURANCE

UNIQA INSURANCE GR

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA INSURANCE GR are ranked lower than 6 (%) 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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

HANOVER INSURANCE

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HANOVER INSURANCE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, HANOVER INSURANCE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with UNIQA INSURANCE and HANOVER INSURANCE

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

The idea behind UNIQA INSURANCE GR and HANOVER INSURANCE 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.