Correlation Between United Insurance and CBRE GROUP-A
Can any of the company-specific risk be diversified away by investing in both United Insurance and CBRE GROUP-A 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 CBRE GROUP-A 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 CBRE GROUP A, you can compare the effects of market volatilities on United Insurance and CBRE GROUP-A 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 CBRE GROUP-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and CBRE GROUP-A.
Diversification Opportunities for United Insurance and CBRE GROUP-A
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and CBRE is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and CBRE GROUP A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBRE GROUP A 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 CBRE GROUP-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBRE GROUP A has no effect on the direction of United Insurance i.e., United Insurance and CBRE GROUP-A go up and down completely randomly.
Pair Corralation between United Insurance and CBRE GROUP-A
Assuming the 90 days horizon United Insurance Holdings is expected to under-perform the CBRE GROUP-A. But the stock apears to be less risky and, when comparing its historical volatility, United Insurance Holdings is 1.07 times less risky than CBRE GROUP-A. The stock trades about -0.05 of its potential returns per unit of risk. The CBRE GROUP A is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 12,400 in CBRE GROUP A on October 20, 2024 and sell it today you would earn a total of 700.00 from holding CBRE GROUP A or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. CBRE GROUP A
Performance |
| Timeline |
| United Insurance Holdings |
| CBRE GROUP A |
United Insurance and CBRE GROUP-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and CBRE GROUP-A
The main advantage of trading using opposite United Insurance and CBRE GROUP-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, CBRE GROUP-A 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 CBRE GROUP-A will offset losses from the drop in CBRE GROUP-A's long position.| United Insurance vs. HEALTHSTREAM | United Insurance vs. FEMALE HEALTH | United Insurance vs. NTT DATA | United Insurance vs. Cass Information Systems |
| CBRE GROUP-A vs. CAREER EDUCATION | CBRE GROUP-A vs. DeVry Education Group | CBRE GROUP-A vs. United Airlines Holdings | CBRE GROUP-A vs. Mitsui Chemicals |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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