Correlation Between United Insurance and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both United Insurance and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on United Insurance and EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and EIDESVIK OFFSHORE.
Diversification Opportunities for United Insurance and EIDESVIK OFFSHORE
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and EIDESVIK is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIDESVIK OFFSHORE has no effect on the direction of United Insurance i.e., United Insurance and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between United Insurance and EIDESVIK OFFSHORE
Assuming the 90 days horizon United Insurance Holdings is expected to generate 3.07 times more return on investment than EIDESVIK OFFSHORE. However, United Insurance is 3.07 times more volatile than EIDESVIK OFFSHORE NK. It trades about 0.12 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about 0.05 per unit of risk. If you would invest 20.00 in United Insurance Holdings on August 30, 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| United Insurance Holdings |
| EIDESVIK OFFSHORE |
United Insurance and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and EIDESVIK OFFSHORE
The main advantage of trading using opposite United Insurance and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE will offset losses from the drop in EIDESVIK OFFSHORE's long position.| United Insurance vs. PICC Property and | United Insurance vs. QBE Insurance Group | United Insurance vs. Superior Plus Corp | United Insurance vs. SIVERS SEMICONDUCTORS AB |
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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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