Correlation Between Universal Insurance and INTUITIVE SURGICAL
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and INTUITIVE SURGICAL 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 INTUITIVE SURGICAL 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 INTUITIVE SURGICAL, you can compare the effects of market volatilities on Universal Insurance and INTUITIVE SURGICAL 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 INTUITIVE SURGICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and INTUITIVE SURGICAL.
Diversification Opportunities for Universal Insurance and INTUITIVE SURGICAL
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and INTUITIVE is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and INTUITIVE SURGICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTUITIVE SURGICAL 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 INTUITIVE SURGICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTUITIVE SURGICAL has no effect on the direction of Universal Insurance i.e., Universal Insurance and INTUITIVE SURGICAL go up and down completely randomly.
Pair Corralation between Universal Insurance and INTUITIVE SURGICAL
Assuming the 90 days horizon Universal Insurance Holdings is expected to generate 1.41 times more return on investment than INTUITIVE SURGICAL. However, Universal Insurance is 1.41 times more volatile than INTUITIVE SURGICAL. It trades about 0.34 of its potential returns per unit of risk. INTUITIVE SURGICAL is currently generating about 0.28 per unit of risk. If you would invest 1,830 in Universal Insurance Holdings on September 4, 2024 and sell it today you would earn a total of 310.00 from holding Universal Insurance Holdings or generate 16.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Insurance Holdings vs. INTUITIVE SURGICAL
Performance |
| Timeline |
| Universal Insurance |
| INTUITIVE SURGICAL |
Universal Insurance and INTUITIVE SURGICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and INTUITIVE SURGICAL
The main advantage of trading using opposite Universal Insurance and INTUITIVE SURGICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, INTUITIVE SURGICAL 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 INTUITIVE SURGICAL will offset losses from the drop in INTUITIVE SURGICAL's long position.| Universal Insurance vs. The Progressive | Universal Insurance vs. The Allstate | Universal Insurance vs. PICC Property and | Universal Insurance vs. Fairfax Financial Holdings |
| INTUITIVE SURGICAL vs. Universal Insurance Holdings | INTUITIVE SURGICAL vs. Zurich Insurance Group | INTUITIVE SURGICAL vs. Gamma Communications plc | INTUITIVE SURGICAL vs. The Hanover Insurance |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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