Correlation Between United Insurance and DALATA HOTEL
Can any of the company-specific risk be diversified away by investing in both United Insurance and DALATA HOTEL 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 DALATA HOTEL 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 DALATA HOTEL, you can compare the effects of market volatilities on United Insurance and DALATA HOTEL 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 DALATA HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and DALATA HOTEL.
Diversification Opportunities for United Insurance and DALATA HOTEL
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and DALATA is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of United Insurance i.e., United Insurance and DALATA HOTEL go up and down completely randomly.
Pair Corralation between United Insurance and DALATA HOTEL
Assuming the 90 days horizon United Insurance Holdings is expected to generate 1.02 times more return on investment than DALATA HOTEL. However, United Insurance is 1.02 times more volatile than DALATA HOTEL. It trades about 0.04 of its potential returns per unit of risk. DALATA HOTEL is currently generating about 0.03 per unit of risk. If you would invest 1,066 in United Insurance Holdings on October 25, 2024 and sell it today you would earn a total of 94.00 from holding United Insurance Holdings or generate 8.82% 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. DALATA HOTEL
Performance |
| Timeline |
| United Insurance Holdings |
| DALATA HOTEL |
United Insurance and DALATA HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and DALATA HOTEL
The main advantage of trading using opposite United Insurance and DALATA HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, DALATA HOTEL 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 DALATA HOTEL will offset losses from the drop in DALATA HOTEL's long position.| United Insurance vs. MOVIE GAMES SA | United Insurance vs. GAMESTOP | United Insurance vs. GigaMedia | United Insurance vs. PENN NATL GAMING |
| DALATA HOTEL vs. FORMPIPE SOFTWARE AB | DALATA HOTEL vs. Kingdee International Software | DALATA HOTEL vs. Host Hotels Resorts | DALATA HOTEL vs. Guidewire Software |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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