Correlation Between DAX Index and Universal Insurance
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By analyzing existing cross correlation between DAX Index and Universal Insurance Holdings, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Universal Insurance.
Diversification Opportunities for DAX Index and Universal Insurance
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAX and Universal is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Universal Insurance go up and down completely randomly.
Pair Corralation between DAX Index and Universal Insurance
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Universal Insurance. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 2.35 times less risky than Universal Insurance. The index trades about -0.05 of its potential returns per unit of risk. The Universal Insurance Holdings is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,780 in Universal Insurance Holdings on August 29, 2024 and sell it today you would earn a total of 360.00 from holding Universal Insurance Holdings or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Universal Insurance Holdings
Performance |
| Timeline |
DAX Index and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Universal Insurance Holdings
Pair trading matchups for Universal Insurance
Pair Trading with DAX Index and Universal Insurance
The main advantage of trading using opposite DAX Index and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
| Universal Insurance vs. Algonquin Power Utilities | Universal Insurance vs. BE Semiconductor Industries | Universal Insurance vs. NORTHEAST UTILITIES | Universal Insurance vs. SERI INDUSTRIAL EO |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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