Correlation Between United Insurance and Amazon
Can any of the company-specific risk be diversified away by investing in both United Insurance and Amazon 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 Amazon 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 Amazon Inc, you can compare the effects of market volatilities on United Insurance and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Amazon.
Diversification Opportunities for United Insurance and Amazon
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Amazon is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of United Insurance i.e., United Insurance and Amazon go up and down completely randomly.
Pair Corralation between United Insurance and Amazon
Assuming the 90 days horizon United Insurance Holdings is expected to generate 5.35 times more return on investment than Amazon. However, United Insurance is 5.35 times more volatile than Amazon Inc. It trades about 0.12 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.1 per unit of risk. If you would invest 20.00 in United Insurance Holdings on September 2, 2024 and sell it today you would earn a total of 1,260 from holding United Insurance Holdings or generate 6300.0% 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. Amazon Inc
Performance |
| Timeline |
| United Insurance Holdings |
| Amazon Inc |
United Insurance and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Amazon
The main advantage of trading using opposite United Insurance and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| United Insurance vs. International Game Technology | United Insurance vs. Platinum Investment Management | United Insurance vs. Ares Management Corp | United Insurance vs. TROPHY GAMES DEV |
| Amazon vs. Richardson Electronics | Amazon vs. Mobilezone Holding AG | Amazon vs. METHODE ELECTRONICS | Amazon vs. Arrow Electronics |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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