Correlation Between East West and Universal Insurance
Can any of the company-specific risk be diversified away by investing in both East West and Universal Insurance 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 East West and Universal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East West Insurance and Universal Insurance, you can compare the effects of market volatilities on East West and Universal Insurance 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 East West with a short position of Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of East West and Universal Insurance.
Diversification Opportunities for East West and Universal Insurance
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between East and Universal is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding East West Insurance and Universal Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and East West 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 East West Insurance are associated (or correlated) with Universal Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Insurance has no effect on the direction of East West i.e., East West and Universal Insurance go up and down completely randomly.
Pair Corralation between East West and Universal Insurance
If you would invest 5,729 in East West Insurance on October 30, 2024 and sell it today you would earn a total of 0.00 from holding East West Insurance or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 35.0% |
| Values | Daily Returns |
East West Insurance vs. Universal Insurance
Performance |
| Timeline |
| East West Insurance |
| Universal Insurance |
East West and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East West and Universal Insurance
The main advantage of trading using opposite East West and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East West position performs unexpectedly, Universal Insurance 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 Universal Insurance will offset losses from the drop in Universal Insurance's long position.| East West vs. Crescent Star Insurance | East West vs. National Foods | East West vs. Century Insurance | East West vs. Bank of Punjab |
| Universal Insurance vs. Pakistan Tobacco | Universal Insurance vs. Premier Insurance | Universal Insurance vs. ORIX Leasing Pakistan | Universal Insurance vs. Orient Rental Modaraba |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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