Correlation Between BROADWIND ENRGY and United Insurance
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY and United 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 BROADWIND ENRGY and United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and United Insurance Holdings, you can compare the effects of market volatilities on BROADWIND ENRGY and United 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 BROADWIND ENRGY with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and United Insurance.
Diversification Opportunities for BROADWIND ENRGY and United Insurance
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BROADWIND and United is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY and United Insurance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Insurance Holdings and BROADWIND ENRGY 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 BROADWIND ENRGY are associated (or correlated) with United Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Insurance Holdings has no effect on the direction of BROADWIND ENRGY i.e., BROADWIND ENRGY and United Insurance go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and United Insurance
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to under-perform the United Insurance. In addition to that, BROADWIND ENRGY is 1.13 times more volatile than United Insurance Holdings. It trades about -0.08 of its total potential returns per unit of risk. United Insurance Holdings is currently generating about 0.04 per unit of volatility. If you would invest 1,066 in United Insurance Holdings on October 26, 2024 and sell it today you would earn a total of 114.00 from holding United Insurance Holdings or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROADWIND ENRGY vs. United Insurance Holdings
Performance |
| Timeline |
| BROADWIND ENRGY |
| United Insurance Holdings |
BROADWIND ENRGY and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and United Insurance
The main advantage of trading using opposite BROADWIND ENRGY and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY position performs unexpectedly, United 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 United Insurance will offset losses from the drop in United Insurance's long position.| BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc | BROADWIND ENRGY vs. Apple Inc |
| United Insurance vs. PICC Property and | United Insurance vs. Fairfax Financial Holdings | United Insurance vs. QBE Insurance Group | United Insurance vs. Insurance Australia Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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