Correlation Between United Insurance and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both United Insurance and Safestore Holdings 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 Safestore Holdings 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 Safestore Holdings plc, you can compare the effects of market volatilities on United Insurance and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Safestore Holdings.
Diversification Opportunities for United Insurance and Safestore Holdings
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Safestore is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings plc 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of United Insurance i.e., United Insurance and Safestore Holdings go up and down completely randomly.
Pair Corralation between United Insurance and Safestore Holdings
Assuming the 90 days horizon United Insurance Holdings is expected to generate 2.32 times more return on investment than Safestore Holdings. However, United Insurance is 2.32 times more volatile than Safestore Holdings plc. It trades about 0.12 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.27 per unit of risk. If you would invest 922.00 in United Insurance Holdings on October 14, 2024 and sell it today you would earn a total of 268.00 from holding United Insurance Holdings or generate 29.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.08% |
| Values | Daily Returns |
United Insurance Holdings vs. Safestore Holdings plc
Performance |
| Timeline |
| United Insurance Holdings |
| Safestore Holdings plc |
United Insurance and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Safestore Holdings
The main advantage of trading using opposite United Insurance and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.| United Insurance vs. PICC Property and | United Insurance vs. QBE Insurance Group | United Insurance vs. Superior Plus Corp | United Insurance vs. NMI Holdings |
| Safestore Holdings vs. COVIVIO HOTELS INH | Safestore Holdings vs. PPHE HOTEL GROUP | Safestore Holdings vs. InterContinental Hotels Group | Safestore Holdings vs. Xenia Hotels Resorts |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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