Correlation Between United Insurance and KBC Group
Can any of the company-specific risk be diversified away by investing in both United Insurance and KBC Group 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 KBC Group 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 KBC Group NV, you can compare the effects of market volatilities on United Insurance and KBC Group 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 KBC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and KBC Group.
Diversification Opportunities for United Insurance and KBC Group
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and KBC is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and KBC Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Group NV 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 KBC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Group NV has no effect on the direction of United Insurance i.e., United Insurance and KBC Group go up and down completely randomly.
Pair Corralation between United Insurance and KBC Group
Assuming the 90 days horizon United Insurance Holdings is expected to under-perform the KBC Group. In addition to that, United Insurance is 2.69 times more volatile than KBC Group NV. It trades about -0.24 of its total potential returns per unit of risk. KBC Group NV is currently generating about 0.04 per unit of volatility. If you would invest 7,264 in KBC Group NV on October 18, 2024 and sell it today you would earn a total of 38.00 from holding KBC Group NV or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. KBC Group NV
Performance |
| Timeline |
| United Insurance Holdings |
| KBC Group NV |
United Insurance and KBC Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and KBC Group
The main advantage of trading using opposite United Insurance and KBC Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, KBC Group 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 KBC Group will offset losses from the drop in KBC Group'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 |
| KBC Group vs. Cars Inc | KBC Group vs. United Insurance Holdings | KBC Group vs. SBI Insurance Group | KBC Group vs. Direct Line Insurance |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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