Correlation Between UNIVERSAL INSURANCE and VETIVA INDUSTRIAL

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

By analyzing existing cross correlation between UNIVERSAL INSURANCE PANY and VETIVA INDUSTRIAL ETF, you can compare the effects of market volatilities on UNIVERSAL INSURANCE and VETIVA INDUSTRIAL 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 VETIVA INDUSTRIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVERSAL INSURANCE and VETIVA INDUSTRIAL.

Diversification Opportunities for UNIVERSAL INSURANCE and VETIVA INDUSTRIAL

0.19

Correlation Coefficient

UNIVERSAL INSURANCE  VETIVA INDUSTRIAL

Average diversification

The 3 months correlation between UNIVERSAL and VETIVA is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL INSURANCE PANY and VETIVA INDUSTRIAL ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VETIVA INDUSTRIAL ETF 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 PANY are associated (or correlated) with VETIVA INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VETIVA INDUSTRIAL ETF has no effect on the direction of UNIVERSAL INSURANCE i.e., UNIVERSAL INSURANCE and VETIVA INDUSTRIAL go up and down completely randomly.

Pair Corralation between UNIVERSAL INSURANCE and VETIVA INDUSTRIAL

Assuming the 90 days trading horizon UNIVERSAL INSURANCE is expected to generate 1.83 times less return on investment than VETIVA INDUSTRIAL. In addition to that, UNIVERSAL INSURANCE is 1.64 times more volatile than VETIVA INDUSTRIAL ETF. It trades about 0.16 of its total potential returns per unit of risk. VETIVA INDUSTRIAL ETF is currently generating about 0.47 per unit of volatility. If you would invest  3,645  in VETIVA INDUSTRIAL ETF on May 4, 2025 and sell it today you would earn a total of  1,355  from holding VETIVA INDUSTRIAL ETF or generate 37.17% return on investment over 90 days.

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

UNIVERSAL INSURANCE PANY  vs.  VETIVA INDUSTRIAL ETF

UNIVERSAL INSURANCE PANY

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UNIVERSAL INSURANCE PANY are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, UNIVERSAL INSURANCE unveiled solid returns over the last few months and may actually be approaching a breakup point.

VETIVA INDUSTRIAL ETF

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VETIVA INDUSTRIAL ETF are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, VETIVA INDUSTRIAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UNIVERSAL INSURANCE and VETIVA INDUSTRIAL

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

The idea behind UNIVERSAL INSURANCE PANY and VETIVA INDUSTRIAL ETF 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.