Correlation Between Japan Medical and Universal Insurance
Can any of the company-specific risk be diversified away by investing in both Japan Medical 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 Japan Medical and Universal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Medical Dynamic and Universal Insurance Holdings, you can compare the effects of market volatilities on Japan Medical 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 Japan Medical with a short position of Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Medical and Universal Insurance.
Diversification Opportunities for Japan Medical and Universal Insurance
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Japan and Universal is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Japan Medical Dynamic and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and Japan Medical 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 Japan Medical Dynamic 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 Japan Medical i.e., Japan Medical and Universal Insurance go up and down completely randomly.
Pair Corralation between Japan Medical and Universal Insurance
Assuming the 90 days horizon Japan Medical is expected to generate 4.66 times less return on investment than Universal Insurance. But when comparing it to its historical volatility, Japan Medical Dynamic is 1.53 times less risky than Universal Insurance. It trades about 0.02 of its potential returns per unit of risk. Universal Insurance Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,774 in Universal Insurance Holdings on September 2, 2024 and sell it today you would earn a total of 386.00 from holding Universal Insurance Holdings or generate 21.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Medical Dynamic vs. Universal Insurance Holdings
Performance |
| Timeline |
| Japan Medical Dynamic |
| Universal Insurance |
Japan Medical and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Medical and Universal Insurance
The main advantage of trading using opposite Japan Medical and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Medical 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.| Japan Medical vs. InterContinental Hotels Group | Japan Medical vs. MIRAMAR HOTEL INV | Japan Medical vs. GRIFFIN MINING LTD | Japan Medical vs. Host Hotels Resorts |
| Universal Insurance vs. Diamyd Medical AB | Universal Insurance vs. Microbot Medical | Universal Insurance vs. Apollo Medical Holdings | Universal Insurance vs. Japan Medical Dynamic |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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