Correlation Between United Insurance and Japan Post
Can any of the company-specific risk be diversified away by investing in both United Insurance and Japan Post 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 Japan Post 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 Japan Post Insurance, you can compare the effects of market volatilities on United Insurance and Japan Post 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 Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Japan Post.
Diversification Opportunities for United Insurance and Japan Post
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Japan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Japan Post Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Insurance 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 Japan Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Post Insurance has no effect on the direction of United Insurance i.e., United Insurance and Japan Post go up and down completely randomly.
Pair Corralation between United Insurance and Japan Post
Assuming the 90 days horizon United Insurance Holdings is expected to generate 2.25 times more return on investment than Japan Post. However, United Insurance is 2.25 times more volatile than Japan Post Insurance. It trades about 0.14 of its potential returns per unit of risk. Japan Post Insurance is currently generating about 0.23 per unit of risk. If you would invest 1,020 in United Insurance Holdings on August 28, 2024 and sell it today you would earn a total of 270.00 from holding United Insurance Holdings or generate 26.47% 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. Japan Post Insurance
Performance |
| Timeline |
| United Insurance Holdings |
| Japan Post Insurance |
United Insurance and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Japan Post
The main advantage of trading using opposite United Insurance and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Japan Post 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 Japan Post will offset losses from the drop in Japan Post's long position.| United Insurance vs. Superior Plus Corp | United Insurance vs. NMI Holdings | United Insurance vs. Origin Agritech | United Insurance vs. SIVERS SEMICONDUCTORS AB |
| Japan Post vs. CONAGRA FOODS | Japan Post vs. Dairy Farm International | Japan Post vs. Mitsui Chemicals | Japan Post vs. CHEMICAL INDUSTRIES |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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