Correlation Between AXAMANSARD INSURANCE and UNIVERSAL INSURANCE

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

By analyzing existing cross correlation between AXAMANSARD INSURANCE PLC and UNIVERSAL INSURANCE PANY, you can compare the effects of market volatilities on AXAMANSARD INSURANCE 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 AXAMANSARD INSURANCE with a short position of UNIVERSAL INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXAMANSARD INSURANCE and UNIVERSAL INSURANCE.

Diversification Opportunities for AXAMANSARD INSURANCE and UNIVERSAL INSURANCE

-0.58

Correlation Coefficient

AXAMANSARD INSURANCE  UNIVERSAL INSURANCE

Excellent diversification

The 3 months correlation between AXAMANSARD and UNIVERSAL is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding AXAMANSARD INSURANCE PLC and UNIVERSAL INSURANCE PANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVERSAL INSURANCE PANY and AXAMANSARD 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 AXAMANSARD INSURANCE PLC 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 PANY has no effect on the direction of AXAMANSARD INSURANCE i.e., AXAMANSARD INSURANCE and UNIVERSAL INSURANCE go up and down completely randomly.

Pair Corralation between AXAMANSARD INSURANCE and UNIVERSAL INSURANCE

Assuming the 90 days trading horizon AXAMANSARD INSURANCE PLC is expected to generate 0.87 times more return on investment than UNIVERSAL INSURANCE. However, AXAMANSARD INSURANCE PLC is 1.15 times less risky than UNIVERSAL INSURANCE. It trades about 0.23 of its potential returns per unit of risk. UNIVERSAL INSURANCE PANY is currently generating about 0.0 per unit of risk. If you would invest  508.00  in AXAMANSARD INSURANCE PLC on September 15, 2024 and sell it today you would earn a total of  245.00  from holding AXAMANSARD INSURANCE PLC or generate 48.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AXAMANSARD INSURANCE PLC  vs.  UNIVERSAL INSURANCE PANY

AXAMANSARD INSURANCE PLC

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AXAMANSARD INSURANCE PLC are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, AXAMANSARD INSURANCE exhibited solid returns over the last few months and may actually be approaching a breakup point.

UNIVERSAL INSURANCE PANY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNIVERSAL INSURANCE PANY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, UNIVERSAL INSURANCE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AXAMANSARD INSURANCE and UNIVERSAL INSURANCE

The main advantage of trading using opposite AXAMANSARD INSURANCE and UNIVERSAL INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXAMANSARD INSURANCE 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.

The idea behind AXAMANSARD INSURANCE PLC and UNIVERSAL INSURANCE PANY 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.