Correlation Between United Insurance and Oriental Land
Can any of the company-specific risk be diversified away by investing in both United Insurance and Oriental Land 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 Oriental Land 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 Oriental Land Co, you can compare the effects of market volatilities on United Insurance and Oriental Land 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 Oriental Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Oriental Land.
Diversification Opportunities for United Insurance and Oriental Land
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Oriental is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Oriental Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Land 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 Oriental Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Land has no effect on the direction of United Insurance i.e., United Insurance and Oriental Land go up and down completely randomly.
Pair Corralation between United Insurance and Oriental Land
Assuming the 90 days horizon United Insurance is expected to generate 2.95 times less return on investment than Oriental Land. But when comparing it to its historical volatility, United Insurance Holdings is 1.28 times less risky than Oriental Land. It trades about 0.03 of its potential returns per unit of risk. Oriental Land Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,080 in Oriental Land Co on November 6, 2024 and sell it today you would earn a total of 60.00 from holding Oriental Land Co or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. Oriental Land Co
Performance |
| Timeline |
| United Insurance Holdings |
| Oriental Land |
United Insurance and Oriental Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Oriental Land
The main advantage of trading using opposite United Insurance and Oriental Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Oriental Land 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 Oriental Land will offset losses from the drop in Oriental Land's long position.| United Insurance vs. Norwegian Air Shuttle | United Insurance vs. REVO INSURANCE SPA | United Insurance vs. RYANAIR HLDGS ADR | United Insurance vs. ALTAIR RES INC |
| Oriental Land vs. CHRYSALIS INVESTMENTS LTD | Oriental Land vs. REINET INVESTMENTS SCA | Oriental Land vs. RYANAIR HLDGS ADR | Oriental Land vs. Luckin Coffee |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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