Correlation Between Universal Insurance and JS Investments
Can any of the company-specific risk be diversified away by investing in both Universal Insurance and JS Investments 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 JS Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Insurance and JS Investments, you can compare the effects of market volatilities on Universal Insurance and JS Investments 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 JS Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Insurance and JS Investments.
Diversification Opportunities for Universal Insurance and JS Investments
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and JSIL is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Universal Insurance and JS Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JS Investments 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 are associated (or correlated) with JS Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JS Investments has no effect on the direction of Universal Insurance i.e., Universal Insurance and JS Investments go up and down completely randomly.
Pair Corralation between Universal Insurance and JS Investments
Assuming the 90 days trading horizon Universal Insurance is expected to generate 16.92 times less return on investment than JS Investments. In addition to that, Universal Insurance is 1.53 times more volatile than JS Investments. It trades about 0.01 of its total potential returns per unit of risk. JS Investments is currently generating about 0.17 per unit of volatility. If you would invest 2,150 in JS Investments on April 21, 2025 and sell it today you would earn a total of 650.00 from holding JS Investments or generate 30.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 88.71% |
Values | Daily Returns |
Universal Insurance vs. JS Investments
Performance |
Timeline |
Universal Insurance |
JS Investments |
Universal Insurance and JS Investments Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Universal Insurance and JS Investments
The main advantage of trading using opposite Universal Insurance and JS Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Insurance position performs unexpectedly, JS Investments 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 JS Investments will offset losses from the drop in JS Investments' long position.Universal Insurance vs. Pakistan Telecommunication | Universal Insurance vs. National Foods | Universal Insurance vs. Pak Gulf Leasing | Universal Insurance vs. NetSol Technologies |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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