Correlation Between Universal Insurance and BNP Paribas
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and BNP Paribas 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 BNP Paribas 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 BNP Paribas SA, you can compare the effects of market volatilities on Universal Insurance and BNP Paribas 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 BNP Paribas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and BNP Paribas.
Diversification Opportunities for Universal Insurance and BNP Paribas
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Universal and BNP is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and BNP Paribas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNP Paribas SA 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 BNP Paribas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNP Paribas SA has no effect on the direction of Universal Insurance i.e., Universal Insurance and BNP Paribas go up and down completely randomly.
Pair Corralation between Universal Insurance and BNP Paribas
Assuming the 90 days horizon Universal Insurance Holdings is expected to generate 1.81 times more return on investment than BNP Paribas. However, Universal Insurance is 1.81 times more volatile than BNP Paribas SA. It trades about 0.06 of its potential returns per unit of risk. BNP Paribas SA is currently generating about 0.02 per unit of risk. If you would invest 1,003 in Universal Insurance Holdings on October 16, 2024 and sell it today you would earn a total of 847.00 from holding Universal Insurance Holdings or generate 84.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Insurance Holdings vs. BNP Paribas SA
Performance |
| Timeline |
| Universal Insurance |
| BNP Paribas SA |
Universal Insurance and BNP Paribas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and BNP Paribas
The main advantage of trading using opposite Universal Insurance and BNP Paribas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, BNP Paribas 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 BNP Paribas will offset losses from the drop in BNP Paribas' long position.| Universal Insurance vs. Hua Hong Semiconductor | Universal Insurance vs. SERI INDUSTRIAL EO | Universal Insurance vs. MAGNUM MINING EXP | Universal Insurance vs. BE Semiconductor Industries |
| BNP Paribas vs. UNIQA INSURANCE GR | BNP Paribas vs. VULCAN MATERIALS | BNP Paribas vs. Japan Post Insurance | BNP Paribas vs. Universal Insurance Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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