Correlation Between Strategic Investments and Universal Insurance
Can any of the company-specific risk be diversified away by investing in both Strategic Investments 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 Strategic Investments and Universal Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and Universal Insurance Holdings, you can compare the effects of market volatilities on Strategic Investments 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 Strategic Investments with a short position of Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and Universal Insurance.
Diversification Opportunities for Strategic Investments and Universal Insurance
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Strategic and Universal is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and Strategic Investments 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 Strategic Investments AS 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 Strategic Investments i.e., Strategic Investments and Universal Insurance go up and down completely randomly.
Pair Corralation between Strategic Investments and Universal Insurance
Assuming the 90 days horizon Strategic Investments is expected to generate 1.96 times less return on investment than Universal Insurance. In addition to that, Strategic Investments is 1.83 times more volatile than Universal Insurance Holdings. It trades about 0.06 of its total potential returns per unit of risk. Universal Insurance Holdings is currently generating about 0.21 per unit of volatility. If you would invest 2,080 in Universal Insurance Holdings on September 2, 2025 and sell it today you would earn a total of 800.00 from holding Universal Insurance Holdings or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. Universal Insurance Holdings
Performance |
| Timeline |
| Strategic Investments |
| Universal Insurance |
Strategic Investments and Universal Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and Universal Insurance
The main advantage of trading using opposite Strategic Investments and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments 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.| Strategic Investments vs. China Railway Construction | Strategic Investments vs. Penta Ocean Construction Co | Strategic Investments vs. Dairy Farm International | Strategic Investments vs. H FARM SPA |
| Universal Insurance vs. Electronic Arts | Universal Insurance vs. ScanSource | Universal Insurance vs. MINCO SILVER | Universal Insurance vs. Yanzhou Coal Mining |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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