Correlation Between Universal Insurance and Horace Mann
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and Horace Mann 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 Universal Insurance and Horace Mann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Insurance Holdings and Horace Mann Educators, you can compare the effects of market volatilities on Universal Insurance and Horace Mann 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 Universal Insurance with a short position of Horace Mann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and Horace Mann.
Diversification Opportunities for Universal Insurance and Horace Mann
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Universal and Horace is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and Horace Mann Educators in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horace Mann Educators and Universal Insurance 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 Universal Insurance Holdings are associated (or correlated) with Horace Mann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horace Mann Educators has no effect on the direction of Universal Insurance i.e., Universal Insurance and Horace Mann go up and down completely randomly.
Pair Corralation between Universal Insurance and Horace Mann
Considering the 90-day investment horizon Universal Insurance Holdings is expected to generate 0.87 times more return on investment than Horace Mann. However, Universal Insurance Holdings is 1.16 times less risky than Horace Mann. It trades about 0.29 of its potential returns per unit of risk. Horace Mann Educators is currently generating about 0.19 per unit of risk. If you would invest 1,963 in Universal Insurance Holdings on August 24, 2024 and sell it today you would earn a total of 296.00 from holding Universal Insurance Holdings or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Insurance Holdings vs. Horace Mann Educators
Performance |
| Timeline |
| Universal Insurance |
| Horace Mann Educators |
Universal Insurance and Horace Mann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and Horace Mann
The main advantage of trading using opposite Universal Insurance and Horace Mann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, Horace Mann 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 Horace Mann will offset losses from the drop in Horace Mann's long position.| Universal Insurance vs. HCI Group | Universal Insurance vs. Kingstone Companies | Universal Insurance vs. Horace Mann Educators | Universal Insurance vs. Heritage Insurance Hldgs |
| Horace Mann vs. Kemper | Horace Mann vs. RLI Corp | Horace Mann vs. Global Indemnity PLC | Horace Mann vs. Argo Group International |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |