Correlation Between United Insurance and SAFETY MEDICAL
Can any of the company-specific risk be diversified away by investing in both United Insurance and SAFETY MEDICAL 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 SAFETY MEDICAL 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 SAFETY MEDICAL PROD, you can compare the effects of market volatilities on United Insurance and SAFETY MEDICAL 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 SAFETY MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and SAFETY MEDICAL.
Diversification Opportunities for United Insurance and SAFETY MEDICAL
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and SAFETY is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and SAFETY MEDICAL PROD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAFETY MEDICAL PROD 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 SAFETY MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAFETY MEDICAL PROD has no effect on the direction of United Insurance i.e., United Insurance and SAFETY MEDICAL go up and down completely randomly.
Pair Corralation between United Insurance and SAFETY MEDICAL
Assuming the 90 days horizon United Insurance Holdings is expected to generate 1.38 times more return on investment than SAFETY MEDICAL. However, United Insurance is 1.38 times more volatile than SAFETY MEDICAL PROD. It trades about 0.07 of its potential returns per unit of risk. SAFETY MEDICAL PROD is currently generating about -0.15 per unit of risk. If you would invest 950.00 in United Insurance Holdings on September 3, 2024 and sell it today you would earn a total of 330.00 from holding United Insurance Holdings or generate 34.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. SAFETY MEDICAL PROD
Performance |
| Timeline |
| United Insurance Holdings |
| SAFETY MEDICAL PROD |
United Insurance and SAFETY MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and SAFETY MEDICAL
The main advantage of trading using opposite United Insurance and SAFETY MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, SAFETY MEDICAL 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 SAFETY MEDICAL will offset losses from the drop in SAFETY MEDICAL's long position.| United Insurance vs. The Progressive | United Insurance vs. The Allstate | United Insurance vs. PICC Property and | United Insurance vs. Fairfax Financial Holdings |
| SAFETY MEDICAL vs. CVS Health | SAFETY MEDICAL vs. FEMALE HEALTH | SAFETY MEDICAL vs. Taylor Morrison Home | SAFETY MEDICAL vs. Autohome ADR |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |