Correlation Between United Insurance and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both United Insurance and PPHE HOTEL 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 United Insurance and PPHE HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Insurance Holdings and PPHE HOTEL GROUP, you can compare the effects of market volatilities on United Insurance and PPHE HOTEL 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 United Insurance with a short position of PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and PPHE HOTEL.
Diversification Opportunities for United Insurance and PPHE HOTEL
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and PPHE is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP and United 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 United Insurance Holdings are associated (or correlated) with PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of United Insurance i.e., United Insurance and PPHE HOTEL go up and down completely randomly.
Pair Corralation between United Insurance and PPHE HOTEL
Assuming the 90 days horizon United Insurance Holdings is expected to generate 2.11 times more return on investment than PPHE HOTEL. However, United Insurance is 2.11 times more volatile than PPHE HOTEL GROUP. It trades about 0.04 of its potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about -0.05 per unit of risk. If you would invest 1,066 in United Insurance Holdings on October 26, 2024 and sell it today you would earn a total of 114.00 from holding United Insurance Holdings or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. PPHE HOTEL GROUP
Performance |
| Timeline |
| United Insurance Holdings |
| PPHE HOTEL GROUP |
United Insurance and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and PPHE HOTEL
The main advantage of trading using opposite United Insurance and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, PPHE HOTEL 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| United Insurance vs. PICC Property and | United Insurance vs. Fairfax Financial Holdings | United Insurance vs. QBE Insurance Group | United Insurance vs. Insurance Australia Group |
| PPHE HOTEL vs. CITY OFFICE REIT | PPHE HOTEL vs. Tower One Wireless | PPHE HOTEL vs. SLR Investment Corp | PPHE HOTEL vs. ECHO INVESTMENT ZY |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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