Correlation Between UNIQA Insurance and AMAG Austria

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

Diversification Opportunities for UNIQA Insurance and AMAG Austria

0.05

Correlation Coefficient

UNIQA Insurance  AMAG Austria

Significant diversification

The 3 months correlation between UNIQA and AMAG is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall 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 AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and AMAG Austria go up and down completely randomly.

Pair Corralation between UNIQA Insurance and AMAG Austria

Assuming the 90 days trading horizon UNIQA Insurance Group is expected to under-perform the AMAG Austria. But the stock apears to be less risky and, when comparing its historical volatility, UNIQA Insurance Group is 1.37 times less risky than AMAG Austria. The stock trades about -0.14 of its potential returns per unit of risk. The AMAG Austria Metall is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  2,400  in AMAG Austria Metall on August 30, 2024 and sell it today you would lose (60.00) from holding AMAG Austria Metall or give up 2.5% of portfolio value over 90 days.

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

UNIQA Insurance Group  vs.  AMAG Austria Metall

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 latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

AMAG Austria Metall

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMAG Austria Metall has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, AMAG Austria is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with UNIQA Insurance and AMAG Austria

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

The idea behind UNIQA Insurance Group and AMAG Austria Metall 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.