Correlation Between UNIQA Insurance and EVN AG

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

Diversification Opportunities for UNIQA Insurance and EVN AG

0.41

Correlation Coefficient

UNIQA Insurance  EVN AG

Very weak diversification

The 3 months correlation between UNIQA and EVN is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and EVN AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVN AG 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 EVN AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVN AG has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and EVN AG go up and down completely randomly.

Pair Corralation between UNIQA Insurance and EVN AG

Assuming the 90 days trading horizon UNIQA Insurance is expected to generate 4.86 times less return on investment than EVN AG. But when comparing it to its historical volatility, UNIQA Insurance Group is 1.91 times less risky than EVN AG. It trades about 0.17 of its potential returns per unit of risk. EVN AG is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest  2,330  in EVN AG on February 21, 2024 and sell it today you would earn a total of  580.00  from holding EVN AG or generate 24.89% return on investment over 90 days.

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

UNIQA Insurance Group  vs.  EVN AG

UNIQA Insurance Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, UNIQA Insurance is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

EVN AG

Risk-Adjusted Performance

33 of 100

Very Strong

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

Pair Trading with UNIQA Insurance and EVN AG

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

The idea behind UNIQA Insurance Group and EVN AG 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.