Correlation Between COMMERCIAL VEHICLE and United Insurance
Can any of the company-specific risk be diversified away by investing in both COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE and United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMMERCIAL VEHICLE and United Insurance Holdings, you can compare the effects of market volatilities on COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMMERCIAL VEHICLE and United Insurance.
Diversification Opportunities for COMMERCIAL VEHICLE and United Insurance
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between COMMERCIAL and United is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE i.e., COMMERCIAL VEHICLE and United Insurance go up and down completely randomly.
Pair Corralation between COMMERCIAL VEHICLE and United Insurance
Assuming the 90 days trading horizon COMMERCIAL VEHICLE is expected to under-perform the United Insurance. In addition to that, COMMERCIAL VEHICLE is 1.83 times more volatile than United Insurance Holdings. It trades about -0.1 of its total potential returns per unit of risk. United Insurance Holdings is currently generating about 0.2 per unit of volatility. If you would invest 1,100 in United Insurance Holdings on September 2, 2024 and sell it today you would earn a total of 180.00 from holding United Insurance Holdings or generate 16.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMMERCIAL VEHICLE vs. United Insurance Holdings
Performance |
| Timeline |
| COMMERCIAL VEHICLE |
| United Insurance Holdings |
COMMERCIAL VEHICLE and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMMERCIAL VEHICLE and United Insurance
The main advantage of trading using opposite COMMERCIAL VEHICLE and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMMERCIAL VEHICLE 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.| COMMERCIAL VEHICLE vs. National Retail Properties | COMMERCIAL VEHICLE vs. Tsingtao Brewery | COMMERCIAL VEHICLE vs. Caseys General Stores | COMMERCIAL VEHICLE vs. AEON STORES |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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