Correlation Between UNITED UTILITIES and UNIQA INSURANCE

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

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

Diversification Opportunities for UNITED UTILITIES and UNIQA INSURANCE

-0.86

Correlation Coefficient

UNITED UTILITIES  UNIQA INSURANCE

Pay attention - limited upside

The 3 months correlation between UNITED and UNIQA is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding UNITED UTILITIES GR 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 UNITED UTILITIES 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 UNITED UTILITIES GR 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 UNITED UTILITIES i.e., UNITED UTILITIES and UNIQA INSURANCE go up and down completely randomly.

Pair Corralation between UNITED UTILITIES and UNIQA INSURANCE

Assuming the 90 days trading horizon UNITED UTILITIES GR is expected to under-perform the UNIQA INSURANCE. In addition to that, UNITED UTILITIES is 1.35 times more volatile than UNIQA INSURANCE GR. It trades about -0.17 of its total potential returns per unit of risk. UNIQA INSURANCE GR is currently generating about 0.31 per unit of volatility. 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	Significant
Accuracy	98.33%
Values	Daily Returns

UNITED UTILITIES GR  vs.  UNIQA INSURANCE GR

UNITED UTILITIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days UNITED UTILITIES GR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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.

Pair Trading with UNITED UTILITIES and UNIQA INSURANCE

The main advantage of trading using opposite UNITED UTILITIES and UNIQA INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED UTILITIES 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.

The idea behind UNITED UTILITIES GR and UNIQA INSURANCE GR 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.