Correlation Between Universal Insurance and UET United
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and UET United 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 UET United 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 UET United Electronic, you can compare the effects of market volatilities on Universal Insurance and UET United 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 UET United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and UET United.
Diversification Opportunities for Universal Insurance and UET United
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and UET is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and UET United Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UET United Electronic 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 UET United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UET United Electronic has no effect on the direction of Universal Insurance i.e., Universal Insurance and UET United go up and down completely randomly.
Pair Corralation between Universal Insurance and UET United
Assuming the 90 days horizon Universal Insurance Holdings is expected to generate 0.64 times more return on investment than UET United. However, Universal Insurance Holdings is 1.56 times less risky than UET United. It trades about 0.07 of its potential returns per unit of risk. UET United Electronic is currently generating about 0.03 per unit of risk. 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 Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Universal Insurance Holdings vs. UET United Electronic
Performance |
Timeline |
Universal Insurance |
UET United Electronic |
Universal Insurance and UET United Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Universal Insurance and UET United
The main advantage of trading using opposite Universal Insurance and UET United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, UET United 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 UET United will offset losses from the drop in UET United's long position.Universal Insurance vs. Transportadora de Gas | Universal Insurance vs. SPORT LISBOA E | Universal Insurance vs. Transport International Holdings | Universal Insurance vs. Columbia Sportswear |
UET United vs. Selective Insurance Group | UET United vs. Japan Post Insurance | UET United vs. Dairy Farm International | UET United vs. Universal Insurance Holdings |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |