Correlation Between United Insurance and COMMERCIAL VEHICLE
Can any of the company-specific risk be diversified away by investing in both United Insurance and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE, you can compare the effects of market volatilities on United Insurance and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and COMMERCIAL VEHICLE.
Diversification Opportunities for United Insurance and COMMERCIAL VEHICLE
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and COMMERCIAL is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and COMMERCIAL VEHICLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL VEHICLE has no effect on the direction of United Insurance i.e., United Insurance and COMMERCIAL VEHICLE go up and down completely randomly.
Pair Corralation between United Insurance and COMMERCIAL VEHICLE
Assuming the 90 days horizon United Insurance Holdings is expected to generate 0.82 times more return on investment than COMMERCIAL VEHICLE. However, United Insurance Holdings is 1.22 times less risky than COMMERCIAL VEHICLE. It trades about 0.06 of its potential returns per unit of risk. COMMERCIAL VEHICLE is currently generating about -0.12 per unit of risk. If you would invest 1,050 in United Insurance Holdings on September 3, 2024 and sell it today you would earn a total of 230.00 from holding United Insurance Holdings or generate 21.9% 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. COMMERCIAL VEHICLE
Performance |
| Timeline |
| United Insurance Holdings |
| COMMERCIAL VEHICLE |
United Insurance and COMMERCIAL VEHICLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and COMMERCIAL VEHICLE
The main advantage of trading using opposite United Insurance and COMMERCIAL VEHICLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE will offset losses from the drop in COMMERCIAL VEHICLE's long position.| United Insurance vs. The Progressive | United Insurance vs. The Allstate | United Insurance vs. PICC Property and | United Insurance vs. Fairfax Financial Holdings |
| COMMERCIAL VEHICLE vs. JD SPORTS FASH | COMMERCIAL VEHICLE vs. ARISTOCRAT LEISURE | COMMERCIAL VEHICLE vs. United Utilities Group | COMMERCIAL VEHICLE vs. Columbia Sportswear |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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