Correlation Between Universal Insurance and CTS Eventim
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and CTS Eventim 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 CTS Eventim 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 CTS Eventim AG, you can compare the effects of market volatilities on Universal Insurance and CTS Eventim 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 CTS Eventim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and CTS Eventim.
Diversification Opportunities for Universal Insurance and CTS Eventim
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Universal and CTS is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and CTS Eventim AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Eventim AG 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 CTS Eventim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Eventim AG has no effect on the direction of Universal Insurance i.e., Universal Insurance and CTS Eventim go up and down completely randomly.
Pair Corralation between Universal Insurance and CTS Eventim
Assuming the 90 days horizon Universal Insurance Holdings is expected to generate 0.7 times more return on investment than CTS Eventim. However, Universal Insurance Holdings is 1.42 times less risky than CTS Eventim. It trades about 0.35 of its potential returns per unit of risk. CTS Eventim AG is currently generating about -0.23 per unit of risk. If you would invest 1,840 in Universal Insurance Holdings on August 31, 2024 and sell it today you would earn a total of 320.00 from holding Universal Insurance Holdings or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Universal Insurance Holdings vs. CTS Eventim AG
Performance |
| Timeline |
| Universal Insurance |
| CTS Eventim AG |
Universal Insurance and CTS Eventim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and CTS Eventim
The main advantage of trading using opposite Universal Insurance and CTS Eventim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, CTS Eventim 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 CTS Eventim will offset losses from the drop in CTS Eventim's long position.| Universal Insurance vs. The Progressive | Universal Insurance vs. Fairfax Financial Holdings | Universal Insurance vs. Admiral Group plc | Universal Insurance vs. Insurance Australia Group |
| CTS Eventim vs. Live Nation Entertainment | CTS Eventim vs. Fuji Media Holdings | CTS Eventim vs. Rai Way SpA | CTS Eventim vs. Superior Plus Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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