Correlation Between Kingstone Companies and Universal Insurance
Can any of the company-specific risk be diversified away by investing in both Kingstone Companies 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 Kingstone Companies and Universal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingstone Companies and Universal Insurance Holdings, you can compare the effects of market volatilities on Kingstone Companies 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 Kingstone Companies with a short position of Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingstone Companies and Universal Insurance.
Diversification Opportunities for Kingstone Companies and Universal Insurance
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kingstone and Universal is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kingstone Companies and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and Kingstone Companies 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 Kingstone Companies 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 Kingstone Companies i.e., Kingstone Companies and Universal Insurance go up and down completely randomly.
Pair Corralation between Kingstone Companies and Universal Insurance
Given the investment horizon of 90 days Kingstone Companies is expected to generate 2.35 times more return on investment than Universal Insurance. However, Kingstone Companies is 2.35 times more volatile than Universal Insurance Holdings. It trades about 0.2 of its potential returns per unit of risk. Universal Insurance Holdings is currently generating about -0.21 per unit of risk. If you would invest 1,503 in Kingstone Companies on November 3, 2024 and sell it today you would earn a total of 196.00 from holding Kingstone Companies or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingstone Companies vs. Universal Insurance Holdings
Performance |
| Timeline |
| Kingstone Companies |
| Universal Insurance |
Kingstone Companies and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingstone Companies and Universal Insurance
The main advantage of trading using opposite Kingstone Companies and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingstone Companies 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.| Kingstone Companies vs. HCI Group | Kingstone Companies vs. Universal Insurance Holdings | Kingstone Companies vs. Horace Mann Educators | Kingstone Companies vs. Heritage Insurance Hldgs |
| Universal Insurance vs. HCI Group | Universal Insurance vs. Kingstone Companies | Universal Insurance vs. Horace Mann Educators | Universal Insurance vs. Heritage Insurance Hldgs |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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