Correlation Between Universal Insurance and Gruppo Mutuionline
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and Gruppo Mutuionline 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 Gruppo Mutuionline 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 Gruppo Mutuionline SpA, you can compare the effects of market volatilities on Universal Insurance and Gruppo Mutuionline 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 Gruppo Mutuionline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and Gruppo Mutuionline.
Diversification Opportunities for Universal Insurance and Gruppo Mutuionline
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and Gruppo is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and Gruppo Mutuionline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo Mutuionline SpA 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 Gruppo Mutuionline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo Mutuionline SpA has no effect on the direction of Universal Insurance i.e., Universal Insurance and Gruppo Mutuionline go up and down completely randomly.
Pair Corralation between Universal Insurance and Gruppo Mutuionline
Assuming the 90 days horizon Universal Insurance Holdings is expected to under-perform the Gruppo Mutuionline. But the stock apears to be less risky and, when comparing its historical volatility, Universal Insurance Holdings is 1.37 times less risky than Gruppo Mutuionline. The stock trades about -0.16 of its potential returns per unit of risk. The Gruppo Mutuionline SpA is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 3,545 in Gruppo Mutuionline SpA on September 18, 2024 and sell it today you would earn a total of 440.00 from holding Gruppo Mutuionline SpA or generate 12.41% 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. Gruppo Mutuionline SpA
Performance |
| Timeline |
| Universal Insurance |
| Gruppo Mutuionline SpA |
Universal Insurance and Gruppo Mutuionline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and Gruppo Mutuionline
The main advantage of trading using opposite Universal Insurance and Gruppo Mutuionline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, Gruppo Mutuionline 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 Gruppo Mutuionline will offset losses from the drop in Gruppo Mutuionline's long position.| Universal Insurance vs. Insurance Australia Group | Universal Insurance vs. Superior Plus Corp | Universal Insurance vs. SIVERS SEMICONDUCTORS AB | Universal Insurance vs. CHINA HUARONG ENERHD 50 |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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