Correlation Between Universal Insurance and Garofalo Health
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and Garofalo Health 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 Garofalo Health 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 Garofalo Health Care, you can compare the effects of market volatilities on Universal Insurance and Garofalo Health 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 Garofalo Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and Garofalo Health.
Diversification Opportunities for Universal Insurance and Garofalo Health
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and Garofalo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and Garofalo Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garofalo Health Care 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 Garofalo Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garofalo Health Care has no effect on the direction of Universal Insurance i.e., Universal Insurance and Garofalo Health go up and down completely randomly.
Pair Corralation between Universal Insurance and Garofalo Health
Assuming the 90 days horizon Universal Insurance Holdings is expected to generate 2.18 times more return on investment than Garofalo Health. However, Universal Insurance is 2.18 times more volatile than Garofalo Health Care. It trades about 0.23 of its potential returns per unit of risk. Garofalo Health Care is currently generating about 0.11 per unit of risk. If you would invest 2,080 in Universal Insurance Holdings on August 21, 2025 and sell it today you would earn a total of 860.00 from holding Universal Insurance Holdings or generate 41.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Insurance Holdings vs. Garofalo Health Care
Performance |
| Timeline |
| Universal Insurance |
| Garofalo Health Care |
Universal Insurance and Garofalo Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and Garofalo Health
The main advantage of trading using opposite Universal Insurance and Garofalo Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, Garofalo Health 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 Garofalo Health will offset losses from the drop in Garofalo Health's long position.| Universal Insurance vs. AUST AGRICULTURAL | Universal Insurance vs. Hope Education Group | Universal Insurance vs. Granite Construction | Universal Insurance vs. Sterling Construction |
| Garofalo Health vs. Fresenius SE Co | Garofalo Health vs. Fresenius Medical Care | Garofalo Health vs. Sonic Healthcare Limited | Garofalo Health vs. Option Care Health |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stocks Directory Find actively traded stocks across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |