Correlation Between United Insurance and Walgreens Boots
Can any of the company-specific risk be diversified away by investing in both United Insurance and Walgreens Boots 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 Walgreens Boots 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 Walgreens Boots Alliance, you can compare the effects of market volatilities on United Insurance and Walgreens Boots 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 Walgreens Boots. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Walgreens Boots.
Diversification Opportunities for United Insurance and Walgreens Boots
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Walgreens is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Walgreens Boots Alliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walgreens Boots Alliance 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 Walgreens Boots. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walgreens Boots Alliance has no effect on the direction of United Insurance i.e., United Insurance and Walgreens Boots go up and down completely randomly.
Pair Corralation between United Insurance and Walgreens Boots
Assuming the 90 days horizon United Insurance Holdings is expected to generate 1.4 times more return on investment than Walgreens Boots. However, United Insurance is 1.4 times more volatile than Walgreens Boots Alliance. It trades about 0.07 of its potential returns per unit of risk. Walgreens Boots Alliance is currently generating about -0.08 per unit of risk. If you would invest 670.00 in United Insurance Holdings on September 12, 2024 and sell it today you would earn a total of 650.00 from holding United Insurance Holdings or generate 97.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. Walgreens Boots Alliance
Performance |
| Timeline |
| United Insurance Holdings |
| Walgreens Boots Alliance |
United Insurance and Walgreens Boots Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Walgreens Boots
The main advantage of trading using opposite United Insurance and Walgreens Boots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Walgreens Boots 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 Walgreens Boots will offset losses from the drop in Walgreens Boots' long position.| United Insurance vs. QBE Insurance Group | United Insurance vs. Insurance Australia Group | United Insurance vs. Superior Plus Corp | United Insurance vs. SIVERS SEMICONDUCTORS AB |
| Walgreens Boots vs. HANOVER INSURANCE | Walgreens Boots vs. INSURANCE AUST GRP | Walgreens Boots vs. REVO INSURANCE SPA | Walgreens Boots vs. United Insurance 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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