Correlation Between Shunfeng International and Universal Insurance

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

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

Diversification Opportunities for Shunfeng International and Universal Insurance

0.0

Correlation Coefficient

Shunfeng International  Universal Insurance

Pay attention - limited upside

The 3 months correlation between Shunfeng and Universal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shunfeng International Clean and Universal Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Insurance and Shunfeng International 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 Shunfeng International Clean 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 Shunfeng International i.e., Shunfeng International and Universal Insurance go up and down completely randomly.

Pair Corralation between Shunfeng International and Universal Insurance

If you would invest  1,957  in Universal Insurance Holdings on April 22, 2025 and sell it today you would earn a total of  203.00  from holding Universal Insurance Holdings or generate 10.37% return on investment over 90 days.

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

Shunfeng International Clean  vs.  Universal Insurance Holdings

Shunfeng International

Risk-Adjusted Performance

Very Weak

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

Universal Insurance

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Insurance Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Universal Insurance may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Shunfeng International and Universal Insurance

The main advantage of trading using opposite Shunfeng International and Universal Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shunfeng International 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 Shunfeng International Clean 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.