Correlation Between Universal Insurance and Computer
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and Computer 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 Computer 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 Computer And Technologies, you can compare the effects of market volatilities on Universal Insurance and Computer 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 Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and Computer.
Diversification Opportunities for Universal Insurance and Computer
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Universal and Computer is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and Computer And Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer And Technologies 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 Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer And Technologies has no effect on the direction of Universal Insurance i.e., Universal Insurance and Computer go up and down completely randomly.
Pair Corralation between Universal Insurance and Computer
Assuming the 90 days horizon Universal Insurance is expected to generate 1.09 times less return on investment than Computer. But when comparing it to its historical volatility, Universal Insurance Holdings is 1.34 times less risky than Computer. It trades about 0.07 of its potential returns per unit of risk. Computer And Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8.64 in Computer And Technologies on September 24, 2024 and sell it today you would earn a total of 9.36 from holding Computer And Technologies or generate 108.33% 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. Computer And Technologies
Performance |
| Timeline |
| Universal Insurance |
| Computer And Technologies |
Universal Insurance and Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and Computer
The main advantage of trading using opposite Universal Insurance and Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, Computer 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 Computer will offset losses from the drop in Computer's long position.| Universal Insurance vs. The Progressive | Universal Insurance vs. The Allstate | Universal Insurance vs. PICC Property and | Universal Insurance vs. Cincinnati Financial |
| Computer vs. The Hanover Insurance | Computer vs. INSURANCE AUST GRP | Computer vs. LIFENET INSURANCE CO | Computer 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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