Correlation Between Universal Insurance and Habib Sugar

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

By analyzing existing cross correlation between Universal Insurance and Habib Sugar Mills, you can compare the effects of market volatilities on Universal Insurance and Habib Sugar 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 Habib Sugar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and Habib Sugar.

Diversification Opportunities for Universal Insurance and Habib Sugar

0.0

Correlation Coefficient

Universal Insurance  Habib Sugar

Pay attention - limited upside

The 3 months correlation between Universal and Habib is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance and Habib Sugar Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habib Sugar Mills 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 Habib Sugar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habib Sugar Mills has no effect on the direction of Universal Insurance i.e., Universal Insurance and Habib Sugar go up and down completely randomly.

Pair Corralation between Universal Insurance and Habib Sugar

If you would invest  949.00  in Universal Insurance on October 17, 2024 and sell it today you would earn a total of  130.00  from holding Universal Insurance or generate 13.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.56%
Values	Daily Returns

Universal Insurance  vs.  Habib Sugar Mills

Universal Insurance

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Insurance are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Universal Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Habib Sugar Mills

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Habib Sugar Mills has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Habib Sugar is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Universal Insurance and Habib Sugar

The main advantage of trading using opposite Universal Insurance and Habib Sugar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, Habib Sugar 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 Habib Sugar will offset losses from the drop in Habib Sugar's long position.

The idea behind Universal Insurance and Habib Sugar Mills 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.