Correlation Between UNIQA Insurance and Addiko Bank

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

Diversification Opportunities for UNIQA Insurance and Addiko Bank

-0.7

Correlation Coefficient

UNIQA Insurance  Addiko Bank

Excellent diversification

The 3 months correlation between UNIQA and Addiko is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Addiko Bank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addiko Bank 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 Addiko Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addiko Bank AG has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Addiko Bank go up and down completely randomly.

Pair Corralation between UNIQA Insurance and Addiko Bank

Assuming the 90 days trading horizon UNIQA Insurance Group is expected to under-perform the Addiko Bank. But the stock apears to be less risky and, when comparing its historical volatility, UNIQA Insurance Group is 2.87 times less risky than Addiko Bank. The stock trades about -0.02 of its potential returns per unit of risk. The Addiko Bank AG is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,605  in Addiko Bank AG on September 17, 2024 and sell it today you would earn a total of  280.00  from holding Addiko Bank AG or generate 17.45% return on investment over 90 days.

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

UNIQA Insurance Group  vs.  Addiko Bank AG

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. 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.

Addiko Bank AG

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Addiko Bank AG are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Addiko Bank demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UNIQA Insurance and Addiko Bank

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

The idea behind UNIQA Insurance Group and Addiko Bank 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.