Correlation Between INSURANCE AUST and Universal Insurance
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST 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 INSURANCE AUST and Universal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSURANCE AUST GRP and Universal Insurance Holdings, you can compare the effects of market volatilities on INSURANCE AUST 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 INSURANCE AUST with a short position of Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and Universal Insurance.
Diversification Opportunities for INSURANCE AUST and Universal Insurance
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INSURANCE and Universal is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and INSURANCE AUST 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 INSURANCE AUST GRP 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 INSURANCE AUST i.e., INSURANCE AUST and Universal Insurance go up and down completely randomly.
Pair Corralation between INSURANCE AUST and Universal Insurance
Assuming the 90 days trading horizon INSURANCE AUST is expected to generate 1.75 times less return on investment than Universal Insurance. But when comparing it to its historical volatility, INSURANCE AUST GRP is 1.35 times less risky than Universal Insurance. It trades about 0.32 of its potential returns per unit of risk. Universal Insurance Holdings is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,780 in Universal Insurance Holdings on August 28, 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. Universal Insurance Holdings
Performance |
| Timeline |
| INSURANCE AUST GRP |
| Universal Insurance |
INSURANCE AUST and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and Universal Insurance
The main advantage of trading using opposite INSURANCE AUST and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST 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.| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Microsoft |
| Universal Insurance vs. Superior Plus Corp | Universal Insurance vs. NMI Holdings | Universal Insurance vs. Origin Agritech | Universal Insurance vs. SIVERS SEMICONDUCTORS AB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |