Correlation Between United Insurance and MARKET VECTR
Can any of the company-specific risk be diversified away by investing in both United Insurance and MARKET VECTR 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 MARKET VECTR 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 MARKET VECTR RETAIL, you can compare the effects of market volatilities on United Insurance and MARKET VECTR 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 MARKET VECTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and MARKET VECTR.
Diversification Opportunities for United Insurance and MARKET VECTR
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and MARKET is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and MARKET VECTR RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARKET VECTR RETAIL 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 MARKET VECTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARKET VECTR RETAIL has no effect on the direction of United Insurance i.e., United Insurance and MARKET VECTR go up and down completely randomly.
Pair Corralation between United Insurance and MARKET VECTR
Assuming the 90 days horizon United Insurance Holdings is expected to generate 7.29 times more return on investment than MARKET VECTR. However, United Insurance is 7.29 times more volatile than MARKET VECTR RETAIL. It trades about 0.1 of its potential returns per unit of risk. MARKET VECTR RETAIL is currently generating about 0.1 per unit of risk. If you would invest 145.00 in United Insurance Holdings on November 9, 2024 and sell it today you would earn a total of 985.00 from holding United Insurance Holdings or generate 679.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
United Insurance Holdings vs. MARKET VECTR RETAIL
Performance |
| Timeline |
| United Insurance Holdings |
| MARKET VECTR RETAIL |
United Insurance and MARKET VECTR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and MARKET VECTR
The main advantage of trading using opposite United Insurance and MARKET VECTR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, MARKET VECTR 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 MARKET VECTR will offset losses from the drop in MARKET VECTR's long position.| United Insurance vs. TERADATA | United Insurance vs. GEELY AUTOMOBILE | United Insurance vs. China Datang | United Insurance vs. DATAGROUP SE |
| MARKET VECTR vs. MeVis Medical Solutions | MARKET VECTR vs. Haverty Furniture Companies | MARKET VECTR vs. Scandinavian Tobacco Group | MARKET VECTR vs. IMPERIAL TOBACCO |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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