Correlation Between Hua Hong and Universal Insurance
Can any of the company-specific risk be diversified away by investing in both Hua Hong and Universal 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 Hua Hong and Universal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and Universal Insurance Holdings, you can compare the effects of market volatilities on Hua Hong and Universal 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 Hua Hong with a short position of Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and Universal Insurance.
Diversification Opportunities for Hua Hong and Universal Insurance
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hua and Universal is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and Hua Hong 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 Hua Hong Semiconductor are associated (or correlated) with Universal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Insurance has no effect on the direction of Hua Hong i.e., Hua Hong and Universal Insurance go up and down completely randomly.
Pair Corralation between Hua Hong and Universal Insurance
Assuming the 90 days horizon Hua Hong Semiconductor is expected to generate 1.84 times more return on investment than Universal Insurance. However, Hua Hong is 1.84 times more volatile than Universal Insurance Holdings. It trades about 0.19 of its potential returns per unit of risk. Universal Insurance Holdings is currently generating about -0.29 per unit of risk. If you would invest 244.00 in Hua Hong Semiconductor on October 16, 2024 and sell it today you would earn a total of 24.00 from holding Hua Hong Semiconductor or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. Universal Insurance Holdings
Performance |
| Timeline |
| Hua Hong Semiconductor |
| Universal Insurance |
Hua Hong and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and Universal Insurance
The main advantage of trading using opposite Hua Hong and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong position performs unexpectedly, Universal 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 Universal Insurance will offset losses from the drop in Universal Insurance's long position.| Hua Hong vs. NXP Semiconductors NV | Hua Hong vs. Boyd Gaming | Hua Hong vs. PLAYMATES TOYS | Hua Hong vs. OURGAME INTHOLDL 00005 |
| Universal Insurance vs. Hua Hong Semiconductor | Universal Insurance vs. SERI INDUSTRIAL EO | Universal Insurance vs. MAGNUM MINING EXP | Universal Insurance vs. BE Semiconductor Industries |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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