Correlation Between United Insurance and DATAGROUP
Can any of the company-specific risk be diversified away by investing in both United Insurance and DATAGROUP 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 DATAGROUP 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 DATAGROUP SE, you can compare the effects of market volatilities on United Insurance and DATAGROUP 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 DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and DATAGROUP.
Diversification Opportunities for United Insurance and DATAGROUP
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and DATAGROUP is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE 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 DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of United Insurance i.e., United Insurance and DATAGROUP go up and down completely randomly.
Pair Corralation between United Insurance and DATAGROUP
Assuming the 90 days horizon United Insurance Holdings is expected to generate 1.5 times more return on investment than DATAGROUP. However, United Insurance is 1.5 times more volatile than DATAGROUP SE. It trades about 0.05 of its potential returns per unit of risk. DATAGROUP SE is currently generating about 0.0 per unit of risk. If you would invest 955.00 in United Insurance Holdings on October 17, 2024 and sell it today you would earn a total of 195.00 from holding United Insurance Holdings or generate 20.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.32% |
| Values | Daily Returns |
United Insurance Holdings vs. DATAGROUP SE
Performance |
| Timeline |
| United Insurance Holdings |
| DATAGROUP SE |
United Insurance and DATAGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and DATAGROUP
The main advantage of trading using opposite United Insurance and DATAGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, DATAGROUP 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 DATAGROUP will offset losses from the drop in DATAGROUP's long position.| United Insurance vs. PLANT VEDA FOODS | United Insurance vs. Tyson Foods | United Insurance vs. MagnaChip Semiconductor Corp | United Insurance vs. NXP Semiconductors NV |
| DATAGROUP vs. SEKISUI CHEMICAL | DATAGROUP vs. PNC Financial Services | DATAGROUP vs. United Insurance Holdings | DATAGROUP vs. CVB Financial Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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