Correlation Between United Insurance and Take Two
Can any of the company-specific risk be diversified away by investing in both United Insurance and Take Two 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 Take Two 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 Take Two Interactive Software, you can compare the effects of market volatilities on United Insurance and Take Two 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 Take Two. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Take Two.
Diversification Opportunities for United Insurance and Take Two
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Take is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Take Two Interactive Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Take Two Interactive 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 Take Two. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Take Two Interactive has no effect on the direction of United Insurance i.e., United Insurance and Take Two go up and down completely randomly.
Pair Corralation between United Insurance and Take Two
Assuming the 90 days horizon United Insurance Holdings is expected to under-perform the Take Two. In addition to that, United Insurance is 1.48 times more volatile than Take Two Interactive Software. It trades about -0.17 of its total potential returns per unit of risk. Take Two Interactive Software is currently generating about -0.06 per unit of volatility. If you would invest 17,830 in Take Two Interactive Software on October 28, 2024 and sell it today you would lose (308.00) from holding Take Two Interactive Software or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. Take Two Interactive Software
Performance |
| Timeline |
| United Insurance Holdings |
| Take Two Interactive |
United Insurance and Take Two Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Take Two
The main advantage of trading using opposite United Insurance and Take Two positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Take Two 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 Take Two will offset losses from the drop in Take Two's long position.| United Insurance vs. Webster Financial | United Insurance vs. S E BANKEN A | United Insurance vs. Virtu Financial | United Insurance vs. CHIBA BANK |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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