Correlation Between METAIR INVTS and Universal Insurance
Can any of the company-specific risk be diversified away by investing in both METAIR INVTS 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 METAIR INVTS and Universal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METAIR INVTS LTD and Universal Insurance Holdings, you can compare the effects of market volatilities on METAIR INVTS 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 METAIR INVTS with a short position of Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of METAIR INVTS and Universal Insurance.
Diversification Opportunities for METAIR INVTS and Universal Insurance
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between METAIR and Universal is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding METAIR INVTS LTD and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and METAIR INVTS 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 METAIR INVTS LTD 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 METAIR INVTS i.e., METAIR INVTS and Universal Insurance go up and down completely randomly.
Pair Corralation between METAIR INVTS and Universal Insurance
Assuming the 90 days trading horizon METAIR INVTS LTD is expected to under-perform the Universal Insurance. But the stock apears to be less risky and, when comparing its historical volatility, METAIR INVTS LTD is 1.06 times less risky than Universal Insurance. The stock trades about -0.11 of its potential returns per unit of risk. The Universal Insurance Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,906 in Universal Insurance Holdings on October 3, 2024 and sell it today you would earn a total of 54.00 from holding Universal Insurance Holdings or generate 2.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
METAIR INVTS LTD vs. Universal Insurance Holdings
Performance |
Timeline |
METAIR INVTS LTD |
Universal Insurance |
METAIR INVTS and Universal Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with METAIR INVTS and Universal Insurance
The main advantage of trading using opposite METAIR INVTS and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METAIR INVTS 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.METAIR INVTS vs. ATOSS SOFTWARE | METAIR INVTS vs. USU Software AG | METAIR INVTS vs. Take Two Interactive Software | METAIR INVTS vs. ETFS Coffee ETC |
Universal Insurance vs. QBE Insurance Group | Universal Insurance vs. Insurance Australia Group | Universal Insurance vs. Superior Plus Corp | Universal Insurance vs. NMI 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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