Correlation Between SPORT LISBOA and Universal Insurance
Can any of the company-specific risk be diversified away by investing in both SPORT LISBOA 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 SPORT LISBOA and Universal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORT LISBOA E and Universal Insurance Holdings, you can compare the effects of market volatilities on SPORT LISBOA 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 SPORT LISBOA with a short position of Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORT LISBOA and Universal Insurance.
Diversification Opportunities for SPORT LISBOA and Universal Insurance
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPORT and Universal is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SPORT LISBOA E and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and SPORT LISBOA 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 SPORT LISBOA E 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 SPORT LISBOA i.e., SPORT LISBOA and Universal Insurance go up and down completely randomly.
Pair Corralation between SPORT LISBOA and Universal Insurance
Assuming the 90 days horizon SPORT LISBOA E is expected to under-perform the Universal Insurance. But the stock apears to be less risky and, when comparing its historical volatility, SPORT LISBOA E is 1.29 times less risky than Universal Insurance. The stock trades about -0.01 of its potential returns per unit of risk. The Universal Insurance Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 905.00 in Universal Insurance Holdings on September 26, 2024 and sell it today you would earn a total of 1,085 from holding Universal Insurance Holdings or generate 119.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORT LISBOA E vs. Universal Insurance Holdings
Performance |
| Timeline |
| SPORT LISBOA E |
| Universal Insurance |
SPORT LISBOA and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORT LISBOA and Universal Insurance
The main advantage of trading using opposite SPORT LISBOA and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORT LISBOA 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.| SPORT LISBOA vs. The Walt Disney | SPORT LISBOA vs. Charter Communications | SPORT LISBOA vs. Warner Music Group | SPORT LISBOA vs. ViacomCBS |
| Universal Insurance vs. Transportadora de Gas | Universal Insurance vs. SPORT LISBOA E | Universal Insurance vs. Transport International Holdings | Universal Insurance vs. Columbia Sportswear |
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.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |