Correlation Between Universal Insurance and Air Link
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By analyzing existing cross correlation between Universal Insurance and Air Link Communication, you can compare the effects of market volatilities on Universal Insurance and Air Link 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 Air Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and Air Link.
Diversification Opportunities for Universal Insurance and Air Link
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and Air is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance and Air Link Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Link Communication 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 are associated (or correlated) with Air Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Link Communication has no effect on the direction of Universal Insurance i.e., Universal Insurance and Air Link go up and down completely randomly.
Pair Corralation between Universal Insurance and Air Link
Assuming the 90 days trading horizon Universal Insurance is expected to generate 2.23 times more return on investment than Air Link. However, Universal Insurance is 2.23 times more volatile than Air Link Communication. It trades about -0.03 of its potential returns per unit of risk. Air Link Communication is currently generating about -0.13 per unit of risk. If you would invest 1,050 in Universal Insurance on October 25, 2024 and sell it today you would lose (67.00) from holding Universal Insurance or give up 6.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Insurance vs. Air Link Communication
Performance |
| Timeline |
| Universal Insurance |
| Air Link Communication |
Universal Insurance and Air Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and Air Link
The main advantage of trading using opposite Universal Insurance and Air Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, Air Link 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 Air Link will offset losses from the drop in Air Link's long position.| Universal Insurance vs. Engro Polymer Chemicals | Universal Insurance vs. Invest Capital Investment | Universal Insurance vs. Orient Rental Modaraba | Universal Insurance vs. Ghani Chemical Industries |
| Air Link vs. Jubilee Life Insurance | Air Link vs. JS Investments | Air Link vs. 786 Investment Limited | Air Link vs. Fateh Sports Wear |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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