Correlation Between United Insurance and Entain Plc
Can any of the company-specific risk be diversified away by investing in both United Insurance and Entain Plc 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 Entain Plc 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 Entain Plc, you can compare the effects of market volatilities on United Insurance and Entain Plc 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 Entain Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Entain Plc.
Diversification Opportunities for United Insurance and Entain Plc
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Entain is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Entain Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entain Plc 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 Entain Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entain Plc has no effect on the direction of United Insurance i.e., United Insurance and Entain Plc go up and down completely randomly.
Pair Corralation between United Insurance and Entain Plc
Assuming the 90 days horizon United Insurance Holdings is expected to generate 3.7 times more return on investment than Entain Plc. However, United Insurance is 3.7 times more volatile than Entain Plc. It trades about 0.12 of its potential returns per unit of risk. Entain Plc is currently generating about -0.02 per unit of risk. If you would invest 23.00 in United Insurance Holdings on September 4, 2024 and sell it today you would earn a total of 1,257 from holding United Insurance Holdings or generate 5465.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
United Insurance Holdings vs. Entain Plc
Performance |
| Timeline |
| United Insurance Holdings |
| Entain Plc |
United Insurance and Entain Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Entain Plc
The main advantage of trading using opposite United Insurance and Entain Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Entain Plc 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 Entain Plc will offset losses from the drop in Entain Plc's long position.| United Insurance vs. The Progressive | United Insurance vs. The Allstate | United Insurance vs. PICC Property and | United Insurance vs. Fairfax Financial Holdings |
| Entain Plc vs. Wyndham Hotels Resorts | Entain Plc vs. Meli Hotels International | Entain Plc vs. Southwest Airlines Co | Entain Plc vs. Playa Hotels Resorts |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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