Correlation Between United Insurance and Alstria Office
Can any of the company-specific risk be diversified away by investing in both United Insurance and Alstria Office 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 Alstria Office 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 alstria office REIT AG, you can compare the effects of market volatilities on United Insurance and Alstria Office 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 Alstria Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Alstria Office.
Diversification Opportunities for United Insurance and Alstria Office
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Alstria is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and alstria office REIT AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on alstria office REIT 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 Alstria Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of alstria office REIT has no effect on the direction of United Insurance i.e., United Insurance and Alstria Office go up and down completely randomly.
Pair Corralation between United Insurance and Alstria Office
Assuming the 90 days horizon United Insurance Holdings is expected to generate 2.34 times more return on investment than Alstria Office. However, United Insurance is 2.34 times more volatile than alstria office REIT AG. It trades about 0.09 of its potential returns per unit of risk. alstria office REIT AG is currently generating about 0.01 per unit of risk. If you would invest 150.00 in United Insurance Holdings on October 13, 2024 and sell it today you would earn a total of 1,040 from holding United Insurance Holdings or generate 693.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. alstria office REIT AG
Performance |
| Timeline |
| United Insurance Holdings |
| alstria office REIT |
United Insurance and Alstria Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Alstria Office
The main advantage of trading using opposite United Insurance and Alstria Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Alstria Office 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 Alstria Office will offset losses from the drop in Alstria Office's long position.| United Insurance vs. Guangdong Investment Limited | United Insurance vs. CompuGroup Medical SE | United Insurance vs. Japan Asia Investment | United Insurance vs. Apollo Investment Corp |
| Alstria Office vs. Webster Financial | Alstria Office vs. United Insurance Holdings | Alstria Office vs. Osisko Metals | Alstria Office vs. JD SPORTS FASH |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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