Correlation Between United Insurance and Nisshinbo Holdings
Can any of the company-specific risk be diversified away by investing in both United Insurance and Nisshinbo 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 Nisshinbo 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 Nisshinbo Holdings, you can compare the effects of market volatilities on United Insurance and Nisshinbo 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 Nisshinbo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Nisshinbo Holdings.
Diversification Opportunities for United Insurance and Nisshinbo Holdings
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Nisshinbo is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Nisshinbo Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisshinbo Holdings 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 Nisshinbo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisshinbo Holdings has no effect on the direction of United Insurance i.e., United Insurance and Nisshinbo Holdings go up and down completely randomly.
Pair Corralation between United Insurance and Nisshinbo Holdings
Assuming the 90 days horizon United Insurance Holdings is expected to under-perform the Nisshinbo Holdings. In addition to that, United Insurance is 1.99 times more volatile than Nisshinbo Holdings. It trades about -0.25 of its total potential returns per unit of risk. Nisshinbo Holdings is currently generating about -0.12 per unit of volatility. If you would invest 535.00 in Nisshinbo Holdings on October 13, 2024 and sell it today you would lose (15.00) from holding Nisshinbo Holdings or give up 2.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
United Insurance Holdings vs. Nisshinbo Holdings
Performance |
| Timeline |
| United Insurance Holdings |
| Nisshinbo Holdings |
United Insurance and Nisshinbo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Nisshinbo Holdings
The main advantage of trading using opposite United Insurance and Nisshinbo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Nisshinbo 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 Nisshinbo Holdings will offset losses from the drop in Nisshinbo Holdings' long position.| United Insurance vs. Guangdong Investment Limited | United Insurance vs. CompuGroup Medical SE | United Insurance vs. Japan Asia Investment | United Insurance vs. Apollo Investment Corp |
| Nisshinbo Holdings vs. United Insurance Holdings | Nisshinbo Holdings vs. Tower One Wireless | Nisshinbo Holdings vs. Japan Post Insurance | Nisshinbo Holdings vs. The Hanover 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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