Correlation Between Swiss Life and UNIQA Insurance

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

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

Diversification Opportunities for Swiss Life and UNIQA Insurance

-0.32

Correlation Coefficient

Swiss Life  UNIQA Insurance

Very good diversification

The 3 months correlation between Swiss and UNIQA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and UNIQA Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIQA Insurance Group and Swiss Life 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 Swiss Life Holding 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 Group has no effect on the direction of Swiss Life i.e., Swiss Life and UNIQA Insurance go up and down completely randomly.

Pair Corralation between Swiss Life and UNIQA Insurance

Assuming the 90 days trading horizon Swiss Life Holding is expected to generate 2.71 times more return on investment than UNIQA Insurance. However, Swiss Life is 2.71 times more volatile than UNIQA Insurance Group. It trades about 0.02 of its potential returns per unit of risk. UNIQA Insurance Group is currently generating about 0.02 per unit of risk. If you would invest  3,660  in Swiss Life Holding on September 24, 2024 and sell it today you would earn a total of  40.00  from holding Swiss Life Holding or generate 1.09% return on investment over 90 days.

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

Swiss Life Holding  vs.  UNIQA Insurance Group

Swiss Life Holding

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Life Holding are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Swiss Life is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

UNIQA Insurance Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 1 (%) 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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Swiss Life and UNIQA Insurance

The main advantage of trading using opposite Swiss Life and UNIQA Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Life 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 Swiss Life Holding and UNIQA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.