Correlation Between Universal Insurance and ZURICH INSURANCE

Can any of the company-specific risk be diversified away by investing in both Universal Insurance and ZURICH 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 ZURICH 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 ZURICH INSURANCE GROUP, you can compare the effects of market volatilities on Universal Insurance and ZURICH 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 ZURICH INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and ZURICH INSURANCE.

Diversification Opportunities for Universal Insurance and ZURICH INSURANCE

0.41

Correlation Coefficient

Universal Insurance  ZURICH INSURANCE

Very weak diversification

The 3 months correlation between Universal and ZURICH is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance Holdings and ZURICH INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZURICH 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 ZURICH INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZURICH INSURANCE has no effect on the direction of Universal Insurance i.e., Universal Insurance and ZURICH INSURANCE go up and down completely randomly.

Pair Corralation between Universal Insurance and ZURICH INSURANCE

Assuming the 90 days horizon Universal Insurance Holdings is expected to under-perform the ZURICH INSURANCE. In addition to that, Universal Insurance is 1.79 times more volatile than ZURICH INSURANCE GROUP. It trades about -0.05 of its total potential returns per unit of risk. ZURICH INSURANCE GROUP is currently generating about -0.08 per unit of volatility. If you would invest  3,100  in ZURICH INSURANCE GROUP on May 5, 2025 and sell it today you would lose (180.00) from holding ZURICH INSURANCE GROUP or give up 5.81% of portfolio value over 90 days.

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

Universal Insurance Holdings  vs.  ZURICH INSURANCE GROUP

Universal Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Universal Insurance Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Universal Insurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ZURICH INSURANCE

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZURICH INSURANCE GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ZURICH 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 Universal Insurance and ZURICH INSURANCE

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

The idea behind Universal Insurance Holdings and ZURICH INSURANCE GROUP 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.