Correlation Between Universal Insurance and BRAEMAR HOTELS
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and BRAEMAR HOTELS 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 Universal Insurance and BRAEMAR HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Insurance Holdings and BRAEMAR HOTELS RES, you can compare the effects of market volatilities on Universal Insurance and BRAEMAR HOTELS 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 Universal Insurance with a short position of BRAEMAR HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and BRAEMAR HOTELS.
Diversification Opportunities for Universal Insurance and BRAEMAR HOTELS
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Universal and BRAEMAR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and BRAEMAR HOTELS RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAEMAR HOTELS RES and Universal 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 Universal Insurance Holdings are associated (or correlated) with BRAEMAR HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAEMAR HOTELS RES has no effect on the direction of Universal Insurance i.e., Universal Insurance and BRAEMAR HOTELS go up and down completely randomly.
Pair Corralation between Universal Insurance and BRAEMAR HOTELS
Assuming the 90 days horizon Universal Insurance Holdings is expected to generate 0.57 times more return on investment than BRAEMAR HOTELS. However, Universal Insurance Holdings is 1.74 times less risky than BRAEMAR HOTELS. It trades about -0.2 of its potential returns per unit of risk. BRAEMAR HOTELS RES is currently generating about -0.36 per unit of risk. If you would invest 2,000 in Universal Insurance Holdings on October 25, 2024 and sell it today you would lose (130.00) from holding Universal Insurance Holdings or give up 6.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Insurance Holdings vs. BRAEMAR HOTELS RES
Performance |
| Timeline |
| Universal Insurance |
| BRAEMAR HOTELS RES |
Universal Insurance and BRAEMAR HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and BRAEMAR HOTELS
The main advantage of trading using opposite Universal Insurance and BRAEMAR HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, BRAEMAR HOTELS 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 BRAEMAR HOTELS will offset losses from the drop in BRAEMAR HOTELS's long position.| Universal Insurance vs. PICC Property and | Universal Insurance vs. Fairfax Financial Holdings | Universal Insurance vs. QBE Insurance Group | Universal Insurance vs. Insurance Australia Group |
| BRAEMAR HOTELS vs. Sotherly Hotels | BRAEMAR HOTELS vs. Superior Plus Corp | BRAEMAR HOTELS vs. Origin Agritech | BRAEMAR HOTELS vs. Identiv |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |