Correlation Between Universal Insurance and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and Safety 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 Universal Insurance and Safety Insurance 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 Safety Insurance Group, you can compare the effects of market volatilities on Universal Insurance and Safety 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 Universal Insurance with a short position of Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and Safety Insurance.
Diversification Opportunities for Universal Insurance and Safety Insurance
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Universal and Safety is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance 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 Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of Universal Insurance i.e., Universal Insurance and Safety Insurance go up and down completely randomly.
Pair Corralation between Universal Insurance and Safety Insurance
Considering the 90-day investment horizon Universal Insurance Holdings is expected to under-perform the Safety Insurance. In addition to that, Universal Insurance is 1.12 times more volatile than Safety Insurance Group. It trades about -0.01 of its total potential returns per unit of risk. Safety Insurance Group is currently generating about 0.3 per unit of volatility. If you would invest 6,952 in Safety Insurance Group on September 5, 2025 and sell it today you would earn a total of 598.00 from holding Safety Insurance Group or generate 8.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Insurance Holdings vs. Safety Insurance Group
Performance |
| Timeline |
| Universal Insurance |
| Safety Insurance |
Universal Insurance and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Insurance and Safety Insurance
The main advantage of trading using opposite Universal Insurance and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, Safety 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| Universal Insurance vs. Skillful Craftsman Education | Universal Insurance vs. Juma Technology Corp | Universal Insurance vs. 51Talk Online Education | Universal Insurance vs. Quality Online Education |
| Safety Insurance vs. Geely Automobile Holdings | Safety Insurance vs. CarsalesCom Ltd ADR | Safety Insurance vs. Axcelis Technologies | Safety Insurance vs. Commercial Vehicle Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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