Correlation Between Universal Insurance and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and Ameriprise Financial 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 Ameriprise Financial 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 Ameriprise Financial, you can compare the effects of market volatilities on Universal Insurance and Ameriprise Financial 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 Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and Ameriprise Financial.
Diversification Opportunities for Universal Insurance and Ameriprise Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Universal and Ameriprise is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial 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 Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Universal Insurance i.e., Universal Insurance and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Universal Insurance and Ameriprise Financial
Assuming the 90 days horizon Universal Insurance Holdings is expected to generate 0.71 times more return on investment than Ameriprise Financial. However, Universal Insurance Holdings is 1.41 times less risky than Ameriprise Financial. It trades about 0.41 of its potential returns per unit of risk. Ameriprise Financial is currently generating about 0.23 per unit of risk. If you would invest 1,780 in Universal Insurance Holdings on August 27, 2024 and sell it today you would earn a total of 360.00 from holding Universal Insurance Holdings or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Insurance Holdings vs. Ameriprise Financial
Performance |
| Timeline |
| Universal Insurance |
| Ameriprise Financial |
Universal Insurance and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and Ameriprise Financial
The main advantage of trading using opposite Universal Insurance and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, Ameriprise Financial 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.| Universal Insurance vs. Superior Plus Corp | Universal Insurance vs. NMI Holdings | Universal Insurance vs. Origin Agritech | Universal Insurance vs. SIVERS SEMICONDUCTORS AB |
| Ameriprise Financial vs. MAGNUM MINING EXP | Ameriprise Financial vs. Evolution Mining Limited | Ameriprise Financial vs. MINCO SILVER | Ameriprise Financial vs. Perseus Mining Limited |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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