Correlation Between UNIQA Insurance and Young Cos

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

Diversification Opportunities for UNIQA Insurance and Young Cos

0.33

Correlation Coefficient

UNIQA Insurance  Young Cos

Weak diversification

The 3 months correlation between UNIQA and Young is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Young Cos Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Young Cos Brewery 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 Young Cos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Young Cos Brewery has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Young Cos go up and down completely randomly.

Pair Corralation between UNIQA Insurance and Young Cos

Assuming the 90 days trading horizon UNIQA Insurance Group is expected to generate 0.39 times more return on investment than Young Cos. However, UNIQA Insurance Group is 2.59 times less risky than Young Cos. It trades about 0.05 of its potential returns per unit of risk. Young Cos Brewery is currently generating about 0.02 per unit of risk. If you would invest  605.00  in UNIQA Insurance Group on September 3, 2024 and sell it today you would earn a total of  114.00  from holding UNIQA Insurance Group or generate 18.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.59%
Values	Daily Returns

UNIQA Insurance Group  vs.  Young Cos Brewery

UNIQA Insurance Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNIQA Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Young Cos Brewery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Young Cos Brewery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Young Cos is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with UNIQA Insurance and Young Cos

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

The idea behind UNIQA Insurance Group and Young Cos Brewery 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..