Correlation Between United Insurance and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both United Insurance and GOLD ROAD 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 GOLD ROAD 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 GOLD ROAD RES, you can compare the effects of market volatilities on United Insurance and GOLD ROAD 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 GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and GOLD ROAD.
Diversification Opportunities for United Insurance and GOLD ROAD
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and GOLD is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of United Insurance i.e., United Insurance and GOLD ROAD go up and down completely randomly.
Pair Corralation between United Insurance and GOLD ROAD
Assuming the 90 days horizon United Insurance is expected to generate 2.26 times less return on investment than GOLD ROAD. In addition to that, United Insurance is 1.54 times more volatile than GOLD ROAD RES. It trades about 0.04 of its total potential returns per unit of risk. GOLD ROAD RES is currently generating about 0.14 per unit of volatility. If you would invest 101.00 in GOLD ROAD RES on October 26, 2024 and sell it today you would earn a total of 46.00 from holding GOLD ROAD RES or generate 45.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. GOLD ROAD RES
Performance |
| Timeline |
| United Insurance Holdings |
| GOLD ROAD RES |
United Insurance and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and GOLD ROAD
The main advantage of trading using opposite United Insurance and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.| United Insurance vs. PICC Property and | United Insurance vs. Fairfax Financial Holdings | United Insurance vs. QBE Insurance Group | United Insurance vs. Insurance Australia Group |
| GOLD ROAD vs. New Residential Investment | GOLD ROAD vs. KENEDIX OFFICE INV | GOLD ROAD vs. AOYAMA TRADING | GOLD ROAD vs. Infrastrutture Wireless Italiane |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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