Correlation Between United Insurance and PICC Property
Can any of the company-specific risk be diversified away by investing in both United Insurance and PICC Property 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 PICC Property 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 PICC Property and, you can compare the effects of market volatilities on United Insurance and PICC Property 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 PICC Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and PICC Property.
Diversification Opportunities for United Insurance and PICC Property
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and PICC is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and PICC Property and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICC Property 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 PICC Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICC Property has no effect on the direction of United Insurance i.e., United Insurance and PICC Property go up and down completely randomly.
Pair Corralation between United Insurance and PICC Property
Assuming the 90 days horizon United Insurance is expected to generate 1.17 times less return on investment than PICC Property. But when comparing it to its historical volatility, United Insurance Holdings is 1.07 times less risky than PICC Property. It trades about 0.19 of its potential returns per unit of risk. PICC Property and is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 119.00 in PICC Property and on August 29, 2024 and sell it today you would earn a total of 23.00 from holding PICC Property and or generate 19.33% 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. PICC Property and
Performance |
| Timeline |
| United Insurance Holdings |
| PICC Property |
United Insurance and PICC Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and PICC Property
The main advantage of trading using opposite United Insurance and PICC Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, PICC Property 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 PICC Property will offset losses from the drop in PICC Property's long position.| United Insurance vs. PICC Property and | United Insurance vs. QBE Insurance Group | United Insurance vs. Superior Plus Corp | United Insurance vs. SIVERS SEMICONDUCTORS AB |
| PICC Property vs. COMPUTERSHARE | PICC Property vs. Vastned Retail NV | PICC Property vs. Hemisphere Energy Corp | PICC Property vs. Liberty Broadband |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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