Correlation Between UNIQA INSURANCE and Chesapeake Utilities

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

Diversification Opportunities for UNIQA INSURANCE and Chesapeake Utilities

-0.27

Correlation Coefficient

UNIQA INSURANCE  Chesapeake Utilities

Very good diversification

The 3 months correlation between UNIQA and Chesapeake is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA INSURANCE GR and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities 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 Chesapeake Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Utilities has no effect on the direction of UNIQA INSURANCE i.e., UNIQA INSURANCE and Chesapeake Utilities go up and down completely randomly.

Pair Corralation between UNIQA INSURANCE and Chesapeake Utilities

Assuming the 90 days trading horizon UNIQA INSURANCE GR is expected to generate 0.91 times more return on investment than Chesapeake Utilities. However, UNIQA INSURANCE GR is 1.1 times less risky than Chesapeake Utilities. It trades about 0.31 of its potential returns per unit of risk. Chesapeake Utilities is currently generating about 0.0 per unit of risk. If you would invest  719.00  in UNIQA INSURANCE GR on December 6, 2024 and sell it today you would earn a total of  160.00  from holding UNIQA INSURANCE GR or generate 22.25% 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.  Chesapeake Utilities

UNIQA INSURANCE GR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA INSURANCE GR are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, UNIQA INSURANCE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Chesapeake Utilities

Risk-Adjusted Performance

Very Weak

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

Pair Trading with UNIQA INSURANCE and Chesapeake Utilities

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

The idea behind UNIQA INSURANCE GR and Chesapeake Utilities 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.