Correlation Between United Insurance and Packagingof America
Can any of the company-specific risk be diversified away by investing in both United Insurance and Packagingof America 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 Packagingof America 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 Packaging of, you can compare the effects of market volatilities on United Insurance and Packagingof America 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 Packagingof America. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Packagingof America.
Diversification Opportunities for United Insurance and Packagingof America
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Packagingof is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Packaging of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packagingof America 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 Packagingof America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packagingof America has no effect on the direction of United Insurance i.e., United Insurance and Packagingof America go up and down completely randomly.
Pair Corralation between United Insurance and Packagingof America
Assuming the 90 days horizon United Insurance Holdings is expected to generate 0.84 times more return on investment than Packagingof America. However, United Insurance Holdings is 1.19 times less risky than Packagingof America. It trades about -0.13 of its potential returns per unit of risk. Packaging of is currently generating about -0.13 per unit of risk. If you would invest 1,250 in United Insurance Holdings on November 3, 2024 and sell it today you would lose (70.00) from holding United Insurance Holdings or give up 5.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Insurance Holdings vs. Packaging of
Performance |
| Timeline |
| United Insurance Holdings |
| Packagingof America |
United Insurance and Packagingof America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Packagingof America
The main advantage of trading using opposite United Insurance and Packagingof America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Packagingof America 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 Packagingof America will offset losses from the drop in Packagingof America's long position.| United Insurance vs. Take Two Interactive Software | United Insurance vs. Beta Systems Software | United Insurance vs. Easy Software AG | United Insurance vs. ASURE SOFTWARE |
| Packagingof America vs. STMicroelectronics NV | Packagingof America vs. MEDICAL FACILITIES NEW | Packagingof America vs. Methode Electronics | Packagingof America vs. Delta Electronics Public |
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 Stocks Directory module to find actively traded stocks across global markets.
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