Correlation Between GOLD ROAD and United Insurance
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD 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 GOLD ROAD and United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLD ROAD RES and United Insurance Holdings, you can compare the effects of market volatilities on GOLD ROAD 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 GOLD ROAD with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and United Insurance.
Diversification Opportunities for GOLD ROAD and United Insurance
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GOLD and United is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES 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 GOLD ROAD 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 GOLD ROAD RES 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 GOLD ROAD i.e., GOLD ROAD and United Insurance go up and down completely randomly.
Pair Corralation between GOLD ROAD and United Insurance
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 0.65 times more return on investment than United Insurance. However, GOLD ROAD RES is 1.54 times less risky than United Insurance. It trades about 0.14 of its potential returns per unit of risk. United Insurance Holdings is currently generating about 0.04 per unit of risk. If you would invest 101.00 in GOLD ROAD RES on October 26, 2024 and sell it today you would earn a total of 46.00 from holding GOLD ROAD RES or generate 45.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLD ROAD RES vs. United Insurance Holdings
Performance |
| Timeline |
| GOLD ROAD RES |
| United Insurance Holdings |
GOLD ROAD and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and United Insurance
The main advantage of trading using opposite GOLD ROAD and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD 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.| GOLD ROAD vs. New Residential Investment | GOLD ROAD vs. KENEDIX OFFICE INV | GOLD ROAD vs. AOYAMA TRADING | GOLD ROAD vs. Infrastrutture Wireless Italiane |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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