Correlation Between United Insurance and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both United Insurance and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH, you can compare the effects of market volatilities on United Insurance and FEMALE HEALTH 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 FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and FEMALE HEALTH.
Diversification Opportunities for United Insurance and FEMALE HEALTH
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and FEMALE is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of United Insurance i.e., United Insurance and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between United Insurance and FEMALE HEALTH
Assuming the 90 days horizon United Insurance Holdings is expected to under-perform the FEMALE HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, United Insurance Holdings is 2.55 times less risky than FEMALE HEALTH. The stock trades about -0.19 of its potential returns per unit of risk. The FEMALE HEALTH is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 68.00 in FEMALE HEALTH on October 17, 2024 and sell it today you would earn a total of 6.00 from holding FEMALE HEALTH or generate 8.82% 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. FEMALE HEALTH
Performance |
| Timeline |
| United Insurance Holdings |
| FEMALE HEALTH |
United Insurance and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and FEMALE HEALTH
The main advantage of trading using opposite United Insurance and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, FEMALE HEALTH 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH'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 |
| FEMALE HEALTH vs. Linedata Services SA | FEMALE HEALTH vs. Teradata Corp | FEMALE HEALTH vs. HANOVER INSURANCE | FEMALE HEALTH vs. United Insurance Holdings |
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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