Correlation Between UNIQA INSURANCE and KOWORLD AG

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

Diversification Opportunities for UNIQA INSURANCE and KOWORLD AG

0.48

Correlation Coefficient

UNIQA INSURANCE  KOWORLD AG

Very weak diversification

The 3 months correlation between UNIQA and KOWORLD is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA INSURANCE GR and KOWORLD AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOWORLD 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 GR are associated (or correlated) with KOWORLD AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOWORLD AG has no effect on the direction of UNIQA INSURANCE i.e., UNIQA INSURANCE and KOWORLD AG go up and down completely randomly.

Pair Corralation between UNIQA INSURANCE and KOWORLD AG

Assuming the 90 days trading horizon UNIQA INSURANCE GR is expected to generate 1.12 times more return on investment than KOWORLD AG. However, UNIQA INSURANCE is 1.12 times more volatile than KOWORLD AG. It trades about 0.17 of its potential returns per unit of risk. KOWORLD AG is currently generating about 0.13 per unit of risk. If you would invest  942.00  in UNIQA INSURANCE GR on April 22, 2025 and sell it today you would earn a total of  232.00  from holding UNIQA INSURANCE GR or generate 24.63% return on investment over 90 days.

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

UNIQA INSURANCE GR  vs.  KOWORLD AG

UNIQA INSURANCE GR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA INSURANCE GR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, UNIQA INSURANCE unveiled solid returns over the last few months and may actually be approaching a breakup point.

KOWORLD AG

Risk-Adjusted Performance

OK

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

Pair Trading with UNIQA INSURANCE and KOWORLD AG

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

The idea behind UNIQA INSURANCE GR and KOWORLD 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.