Correlation Between UNIQA Insurance and Dassault Aviation

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

Diversification Opportunities for UNIQA Insurance and Dassault Aviation

-0.06

Correlation Coefficient

UNIQA Insurance  Dassault Aviation

Good diversification

The 3 months correlation between UNIQA and Dassault is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Dassault Aviation SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dassault Aviation 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 Dassault Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dassault Aviation has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Dassault Aviation go up and down completely randomly.

Pair Corralation between UNIQA Insurance and Dassault Aviation

Assuming the 90 days trading horizon UNIQA Insurance Group is expected to under-perform the Dassault Aviation. But the stock apears to be less risky and, when comparing its historical volatility, UNIQA Insurance Group is 1.75 times less risky than Dassault Aviation. The stock trades about -0.01 of its potential returns per unit of risk. The Dassault Aviation SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  18,941  in Dassault Aviation SA on September 21, 2024 and sell it today you would earn a total of  109.00  from holding Dassault Aviation SA or generate 0.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.85%
Values	Daily Returns

UNIQA Insurance Group  vs.  Dassault Aviation SA

UNIQA Insurance Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 3 (%) 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.

Dassault Aviation

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dassault Aviation SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Dassault Aviation is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with UNIQA Insurance and Dassault Aviation

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

The idea behind UNIQA Insurance Group and Dassault Aviation SA 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.