Correlation Between Cromwell Property and Universal Insurance

Can any of the company-specific risk be diversified away by investing in both Cromwell Property 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 Cromwell Property and Universal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cromwell Property Group and Universal Insurance Holdings, you can compare the effects of market volatilities on Cromwell Property 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 Cromwell Property with a short position of Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cromwell Property and Universal Insurance.

Diversification Opportunities for Cromwell Property and Universal Insurance

0.0

Correlation Coefficient

Cromwell Property  Universal Insurance

Pay attention - limited upside

The 3 months correlation between Cromwell and Universal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cromwell Property Group and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and Cromwell Property 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 Cromwell Property Group 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 Cromwell Property i.e., Cromwell Property and Universal Insurance go up and down completely randomly.

Pair Corralation between Cromwell Property and Universal Insurance

If you would invest  2,062  in Universal Insurance Holdings on December 21, 2024 and sell it today you would earn a total of  116.00  from holding Universal Insurance Holdings or generate 5.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cromwell Property Group  vs.  Universal Insurance Holdings

Cromwell Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cromwell Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Cromwell Property is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Universal Insurance

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Insurance Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Universal Insurance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Cromwell Property and Universal Insurance

The main advantage of trading using opposite Cromwell Property and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cromwell Property 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.

The idea behind Cromwell Property Group and Universal Insurance Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.