Correlation Between United Insurance and CanSino Biologics
Can any of the company-specific risk be diversified away by investing in both United Insurance and CanSino Biologics 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 CanSino Biologics 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 CanSino Biologics, you can compare the effects of market volatilities on United Insurance and CanSino Biologics 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 CanSino Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and CanSino Biologics.
Diversification Opportunities for United Insurance and CanSino Biologics
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and CanSino is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and CanSino Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanSino Biologics 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 CanSino Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanSino Biologics has no effect on the direction of United Insurance i.e., United Insurance and CanSino Biologics go up and down completely randomly.
Pair Corralation between United Insurance and CanSino Biologics
Assuming the 90 days horizon United Insurance Holdings is expected to generate 1.87 times more return on investment than CanSino Biologics. However, United Insurance is 1.87 times more volatile than CanSino Biologics. It trades about 0.09 of its potential returns per unit of risk. CanSino Biologics is currently generating about -0.03 per unit of risk. If you would invest 151.00 in United Insurance Holdings on October 15, 2024 and sell it today you would earn a total of 1,039 from holding United Insurance Holdings or generate 688.08% 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. CanSino Biologics
Performance |
| Timeline |
| United Insurance Holdings |
| CanSino Biologics |
United Insurance and CanSino Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and CanSino Biologics
The main advantage of trading using opposite United Insurance and CanSino Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, CanSino Biologics 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 CanSino Biologics will offset losses from the drop in CanSino Biologics' long position.| United Insurance vs. VITEC SOFTWARE GROUP | United Insurance vs. Easy Software AG | United Insurance vs. ASURE SOFTWARE | United Insurance vs. Constellation Software |
| CanSino Biologics vs. Tradeweb Markets | CanSino Biologics vs. GigaMedia | CanSino Biologics vs. CONTAGIOUS GAMING INC | CanSino Biologics vs. GAMING FAC SA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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