Correlation Between Union Insurance and Sun Sea
Can any of the company-specific risk be diversified away by investing in both Union Insurance and Sun Sea 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 Union Insurance and Sun Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Insurance Co and Sun Sea Construction, you can compare the effects of market volatilities on Union Insurance and Sun Sea 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 Union Insurance with a short position of Sun Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Insurance and Sun Sea.
Diversification Opportunities for Union Insurance and Sun Sea
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Union and Sun is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Union Insurance Co and Sun Sea Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Sea Construction and Union 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 Union Insurance Co are associated (or correlated) with Sun Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Sea Construction has no effect on the direction of Union Insurance i.e., Union Insurance and Sun Sea go up and down completely randomly.
Pair Corralation between Union Insurance and Sun Sea
Assuming the 90 days trading horizon Union Insurance Co is expected to generate 0.35 times more return on investment than Sun Sea. However, Union Insurance Co is 2.88 times less risky than Sun Sea. It trades about 0.17 of its potential returns per unit of risk. Sun Sea Construction is currently generating about 0.04 per unit of risk. If you would invest 3,130 in Union Insurance Co on October 24, 2024 and sell it today you would earn a total of 85.00 from holding Union Insurance Co or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Insurance Co vs. Sun Sea Construction
Performance |
| Timeline |
| Union Insurance |
| Sun Sea Construction |
Union Insurance and Sun Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Insurance and Sun Sea
The main advantage of trading using opposite Union Insurance and Sun Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Insurance position performs unexpectedly, Sun Sea 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 Sun Sea will offset losses from the drop in Sun Sea's long position.| Union Insurance vs. Shinkong Insurance Co | Union Insurance vs. Central Reinsurance Corp | Union Insurance vs. Taiwan Fire Marine | Union Insurance vs. Taichung Commercial Bank |
| Sun Sea vs. Union Insurance Co | Sun Sea vs. Hua Nan Financial | Sun Sea vs. Sinopac Financial Holdings | Sun Sea vs. First Insurance Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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