Correlation Between United Insurance and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both United Insurance and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE, you can compare the effects of market volatilities on United Insurance and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and GEELY AUTOMOBILE.
Diversification Opportunities for United Insurance and GEELY AUTOMOBILE
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and GEELY is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of United Insurance i.e., United Insurance and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between United Insurance and GEELY AUTOMOBILE
Assuming the 90 days horizon United Insurance Holdings is expected to under-perform the GEELY AUTOMOBILE. In addition to that, United Insurance is 1.18 times more volatile than GEELY AUTOMOBILE. It trades about -0.12 of its total potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about -0.1 per unit of volatility. If you would invest 181.00 in GEELY AUTOMOBILE on October 29, 2024 and sell it today you would lose (6.00) from holding GEELY AUTOMOBILE or give up 3.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| United Insurance Holdings |
| GEELY AUTOMOBILE |
United Insurance and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and GEELY AUTOMOBILE
The main advantage of trading using opposite United Insurance and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| United Insurance vs. Daito Trust Construction | United Insurance vs. Olympic Steel | United Insurance vs. Sumitomo Mitsui Construction | United Insurance vs. MAANSHAN IRON H |
| GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc | GEELY AUTOMOBILE vs. Apple Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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