Correlation Between United Insurance and Carsales
Can any of the company-specific risk be diversified away by investing in both United Insurance and Carsales 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 Carsales 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 Carsales, you can compare the effects of market volatilities on United Insurance and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Carsales.
Diversification Opportunities for United Insurance and Carsales
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and Carsales is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Carsales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carsales 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carsales has no effect on the direction of United Insurance i.e., United Insurance and Carsales go up and down completely randomly.
Pair Corralation between United Insurance and Carsales
Assuming the 90 days horizon United Insurance Holdings is expected to under-perform the Carsales. But the stock apears to be less risky and, when comparing its historical volatility, United Insurance Holdings is 1.31 times less risky than Carsales. The stock trades about -0.09 of its potential returns per unit of risk. The Carsales is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,400 in Carsales on November 9, 2024 and sell it today you would earn a total of 20.00 from holding Carsales or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. Carsales
Performance |
| Timeline |
| United Insurance Holdings |
| Carsales |
United Insurance and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Carsales
The main advantage of trading using opposite United Insurance and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| United Insurance vs. TERADATA | United Insurance vs. GEELY AUTOMOBILE | United Insurance vs. China Datang | United Insurance vs. DATAGROUP SE |
| Carsales vs. SINGAPORE AIRLINES | Carsales vs. SOLSTAD OFFSHORE NK | Carsales vs. United Airlines Holdings | Carsales vs. AEGEAN AIRLINES |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |