Correlation Between UNIQA INSURANCE and Peabody Energy

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

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

Diversification Opportunities for UNIQA INSURANCE and Peabody Energy

-0.66

Correlation Coefficient

UNIQA INSURANCE  Peabody Energy

Excellent diversification

The 3 months correlation between UNIQA and Peabody is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA INSURANCE GR and Peabody Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peabody Energy 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 GR are associated (or correlated) with Peabody Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peabody Energy has no effect on the direction of UNIQA INSURANCE i.e., UNIQA INSURANCE and Peabody Energy go up and down completely randomly.

Pair Corralation between UNIQA INSURANCE and Peabody Energy

Assuming the 90 days trading horizon UNIQA INSURANCE GR is expected to generate 0.66 times more return on investment than Peabody Energy. However, UNIQA INSURANCE GR is 1.51 times less risky than Peabody Energy. It trades about 0.22 of its potential returns per unit of risk. Peabody Energy is currently generating about -0.66 per unit of risk. If you would invest  731.00  in UNIQA INSURANCE GR on September 25, 2024 and sell it today you would earn a total of  37.00  from holding UNIQA INSURANCE GR or generate 5.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

UNIQA INSURANCE GR  vs.  Peabody Energy

UNIQA INSURANCE GR

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA INSURANCE GR 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Peabody Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peabody Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with UNIQA INSURANCE and Peabody Energy

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

The idea behind UNIQA INSURANCE GR and Peabody Energy 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.