Correlation Between Easy Software and United Insurance
Can any of the company-specific risk be diversified away by investing in both Easy Software 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 Easy Software and United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Easy Software AG and United Insurance Holdings, you can compare the effects of market volatilities on Easy Software 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 Easy Software with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easy Software and United Insurance.
Diversification Opportunities for Easy Software and United Insurance
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Easy and United is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Easy Software AG 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 Easy Software 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 Easy Software AG 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 Easy Software i.e., Easy Software and United Insurance go up and down completely randomly.
Pair Corralation between Easy Software and United Insurance
Assuming the 90 days trading horizon Easy Software is expected to generate 6.77 times less return on investment than United Insurance. But when comparing it to its historical volatility, Easy Software AG is 2.36 times less risky than United Insurance. It trades about 0.04 of its potential returns per unit of risk. United Insurance Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 147.00 in United Insurance Holdings on October 16, 2024 and sell it today you would earn a total of 1,043 from holding United Insurance Holdings or generate 709.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Easy Software AG vs. United Insurance Holdings
Performance |
| Timeline |
| Easy Software AG |
| United Insurance Holdings |
Easy Software and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Easy Software and United Insurance
The main advantage of trading using opposite Easy Software and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easy Software 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.| Easy Software vs. SOCKET MOBILE NEW | Easy Software vs. MOBILE FACTORY INC | Easy Software vs. United Rentals | Easy Software vs. INTERSHOP Communications Aktiengesellschaft |
| United Insurance vs. VITEC SOFTWARE GROUP | United Insurance vs. Easy Software AG | United Insurance vs. ASURE SOFTWARE | United Insurance vs. Constellation Software |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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