Correlation Between COMBA TELECOM and Universal Insurance

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

By analyzing existing cross correlation between COMBA TELECOM SYST and Universal Insurance Holdings, you can compare the effects of market volatilities on COMBA TELECOM 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 COMBA TELECOM with a short position of Universal Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Universal Insurance.

Diversification Opportunities for COMBA TELECOM and Universal Insurance

-0.72

Correlation Coefficient

COMBA TELECOM  Universal Insurance

Pay attention - limited upside

The 3 months correlation between COMBA and Universal is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and COMBA TELECOM 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 COMBA TELECOM SYST 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 COMBA TELECOM i.e., COMBA TELECOM and Universal Insurance go up and down completely randomly.

Pair Corralation between COMBA TELECOM and Universal Insurance

Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to generate 0.86 times more return on investment than Universal Insurance. However, COMBA TELECOM SYST is 1.17 times less risky than Universal Insurance. It trades about 0.06 of its potential returns per unit of risk. Universal Insurance Holdings is currently generating about -0.07 per unit of risk. If you would invest  17.00  in COMBA TELECOM SYST on May 8, 2025 and sell it today you would earn a total of  1.00  from holding COMBA TELECOM SYST or generate 5.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

COMBA TELECOM SYST  vs.  Universal Insurance Holdings

COMBA TELECOM SYST

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in COMBA TELECOM SYST are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, COMBA TELECOM may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Universal Insurance

Risk-Adjusted Performance

Weakest

Over the last 90 days Universal Insurance Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with COMBA TELECOM and Universal Insurance

The main advantage of trading using opposite COMBA TELECOM and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM 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 COMBA TELECOM SYST and Universal Insurance Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.