Correlation Between Universal Insurance and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and VARIOUS EATERIES 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 VARIOUS EATERIES 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 VARIOUS EATERIES LS, you can compare the effects of market volatilities on Universal Insurance and VARIOUS EATERIES 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 VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and VARIOUS EATERIES.
Diversification Opportunities for Universal Insurance and VARIOUS EATERIES
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Universal and VARIOUS is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of Universal Insurance i.e., Universal Insurance and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between Universal Insurance and VARIOUS EATERIES
Assuming the 90 days horizon Universal Insurance Holdings is expected to generate 0.76 times more return on investment than VARIOUS EATERIES. However, Universal Insurance Holdings is 1.31 times less risky than VARIOUS EATERIES. It trades about 0.03 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about -0.08 per unit of risk. If you would invest 1,875 in Universal Insurance Holdings on December 10, 2024 and sell it today you would earn a total of 105.00 from holding Universal Insurance Holdings or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Insurance Holdings vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| Universal Insurance |
| VARIOUS EATERIES |
Universal Insurance and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and VARIOUS EATERIES
The main advantage of trading using opposite Universal Insurance and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| Universal Insurance vs. SBM OFFSHORE | Universal Insurance vs. Eastman Chemical | Universal Insurance vs. Mitsui Chemicals | Universal Insurance vs. Silicon Motion Technology |
| VARIOUS EATERIES vs. Alfa Financial Software | VARIOUS EATERIES vs. Sqs Software Quality | VARIOUS EATERIES vs. United Airlines Holdings | VARIOUS EATERIES vs. Beta Systems Software |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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