Correlation Between UNIQA Insurance and Vienna Insurance

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

By analyzing existing cross correlation between UNIQA Insurance Group and Vienna Insurance Group, you can compare the effects of market volatilities on UNIQA Insurance and Vienna 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 Vienna Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Vienna Insurance.

Diversification Opportunities for UNIQA Insurance and Vienna Insurance

0.77

Correlation Coefficient

UNIQA Insurance  Vienna Insurance

Poor diversification

The 3 months correlation between UNIQA and Vienna is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Vienna Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vienna 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 Group are associated (or correlated) with Vienna Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vienna Insurance has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Vienna Insurance go up and down completely randomly.

Pair Corralation between UNIQA Insurance and Vienna Insurance

Assuming the 90 days trading horizon UNIQA Insurance is expected to generate 1.28 times less return on investment than Vienna Insurance. But when comparing it to its historical volatility, UNIQA Insurance Group is 1.12 times less risky than Vienna Insurance. It trades about 0.37 of its potential returns per unit of risk. Vienna Insurance Group is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest  3,035  in Vienna Insurance Group on December 29, 2024 and sell it today you would earn a total of  1,060  from holding Vienna Insurance Group or generate 34.93% return on investment over 90 days.

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

UNIQA Insurance Group  vs.  Vienna Insurance Group

UNIQA Insurance Group

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, UNIQA Insurance demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Vienna Insurance

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vienna Insurance Group are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Vienna Insurance demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UNIQA Insurance and Vienna Insurance

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

The idea behind UNIQA Insurance Group and Vienna Insurance Group 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.