Correlation Between United Insurance and Apollo Investment
Can any of the company-specific risk be diversified away by investing in both United Insurance and Apollo Investment 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 Apollo Investment 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 Apollo Investment Corp, you can compare the effects of market volatilities on United Insurance and Apollo Investment 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 Apollo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Apollo Investment.
Diversification Opportunities for United Insurance and Apollo Investment
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Apollo is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Apollo Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Investment Corp 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 Apollo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Investment Corp has no effect on the direction of United Insurance i.e., United Insurance and Apollo Investment go up and down completely randomly.
Pair Corralation between United Insurance and Apollo Investment
Assuming the 90 days horizon United Insurance Holdings is expected to generate 4.58 times more return on investment than Apollo Investment. However, United Insurance is 4.58 times more volatile than Apollo Investment Corp. It trades about 0.14 of its potential returns per unit of risk. Apollo Investment Corp is currently generating about 0.21 per unit of risk. If you would invest 1,010 in United Insurance Holdings on September 5, 2024 and sell it today you would earn a total of 280.00 from holding United Insurance Holdings or generate 27.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. Apollo Investment Corp
Performance |
| Timeline |
| United Insurance Holdings |
| Apollo Investment Corp |
United Insurance and Apollo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Apollo Investment
The main advantage of trading using opposite United Insurance and Apollo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Apollo Investment 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 Apollo Investment will offset losses from the drop in Apollo Investment's long position.| United Insurance vs. The Allstate | United Insurance vs. Fairfax Financial Holdings | United Insurance vs. Insurance Australia Group |
| Apollo Investment vs. The Goldman Sachs | Apollo Investment vs. Superior Plus Corp | Apollo Investment vs. NMI Holdings | Apollo Investment vs. Origin Agritech |
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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