Correlation Between United Insurance and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both United Insurance and Zurich Insurance 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 Zurich Insurance 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 Zurich Insurance Group, you can compare the effects of market volatilities on United Insurance and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Zurich Insurance.
Diversification Opportunities for United Insurance and Zurich Insurance
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Zurich is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of United Insurance i.e., United Insurance and Zurich Insurance go up and down completely randomly.
Pair Corralation between United Insurance and Zurich Insurance
Assuming the 90 days horizon United Insurance Holdings is expected to generate 1.88 times more return on investment than Zurich Insurance. However, United Insurance is 1.88 times more volatile than Zurich Insurance Group. It trades about 0.2 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.12 per unit of risk. If you would invest 1,110 in United Insurance Holdings on August 28, 2024 and sell it today you would earn a total of 180.00 from holding United Insurance Holdings or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. Zurich Insurance Group
Performance |
| Timeline |
| United Insurance Holdings |
| Zurich Insurance |
United Insurance and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Zurich Insurance
The main advantage of trading using opposite United Insurance and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.| United Insurance vs. Superior Plus Corp | United Insurance vs. NMI Holdings | United Insurance vs. Origin Agritech | United Insurance vs. SIVERS SEMICONDUCTORS AB |
| Zurich Insurance vs. Berkshire Hathaway | Zurich Insurance vs. Superior Plus Corp | Zurich Insurance vs. NMI Holdings | Zurich Insurance vs. Origin Agritech |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |