Correlation Between United Insurance and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both United Insurance and TRADEGATE 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 TRADEGATE 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 TRADEGATE, you can compare the effects of market volatilities on United Insurance and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and TRADEGATE.
Diversification Opportunities for United Insurance and TRADEGATE
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and TRADEGATE is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of United Insurance i.e., United Insurance and TRADEGATE go up and down completely randomly.
Pair Corralation between United Insurance and TRADEGATE
Assuming the 90 days horizon United Insurance Holdings is expected to generate 8.74 times more return on investment than TRADEGATE. However, United Insurance is 8.74 times more volatile than TRADEGATE. It trades about 0.1 of its potential returns per unit of risk. TRADEGATE is currently generating about -0.04 per unit of risk. If you would invest 123.00 in United Insurance Holdings on September 3, 2024 and sell it today you would earn a total of 1,157 from holding United Insurance Holdings or generate 940.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. TRADEGATE
Performance |
| Timeline |
| United Insurance Holdings |
| TRADEGATE |
United Insurance and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and TRADEGATE
The main advantage of trading using opposite United Insurance and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE'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 |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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