Correlation Between United Insurance and SAFEROADS HLDGS
Can any of the company-specific risk be diversified away by investing in both United Insurance and SAFEROADS HLDGS 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 SAFEROADS HLDGS 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 SAFEROADS HLDGS, you can compare the effects of market volatilities on United Insurance and SAFEROADS HLDGS 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 SAFEROADS HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and SAFEROADS HLDGS.
Diversification Opportunities for United Insurance and SAFEROADS HLDGS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and SAFEROADS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and SAFEROADS HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAFEROADS HLDGS 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 SAFEROADS HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAFEROADS HLDGS has no effect on the direction of United Insurance i.e., United Insurance and SAFEROADS HLDGS go up and down completely randomly.
Pair Corralation between United Insurance and SAFEROADS HLDGS
Assuming the 90 days horizon United Insurance Holdings is expected to generate 4.53 times more return on investment than SAFEROADS HLDGS. However, United Insurance is 4.53 times more volatile than SAFEROADS HLDGS. It trades about 0.06 of its potential returns per unit of risk. SAFEROADS HLDGS is currently generating about -0.06 per unit of risk. If you would invest 758.00 in United Insurance Holdings on November 5, 2024 and sell it today you would earn a total of 422.00 from holding United Insurance Holdings or generate 55.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.66% |
| Values | Daily Returns |
United Insurance Holdings vs. SAFEROADS HLDGS
Performance |
| Timeline |
| United Insurance Holdings |
| SAFEROADS HLDGS |
United Insurance and SAFEROADS HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and SAFEROADS HLDGS
The main advantage of trading using opposite United Insurance and SAFEROADS HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, SAFEROADS HLDGS 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 SAFEROADS HLDGS will offset losses from the drop in SAFEROADS HLDGS's long position.| United Insurance vs. PICC Property and | United Insurance vs. Cincinnati Financial | United Insurance vs. QBE Insurance Group | United Insurance vs. Admiral Group plc |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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