Correlation Between FedNat Holding and HCI
Can any of the company-specific risk be diversified away by investing in both FedNat Holding and HCI 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 FedNat Holding and HCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FedNat Holding and HCI Group, you can compare the effects of market volatilities on FedNat Holding and HCI 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 FedNat Holding with a short position of HCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of FedNat Holding and HCI.
Diversification Opportunities for FedNat Holding and HCI
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FedNat and HCI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FedNat Holding and HCI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCI Group and FedNat Holding 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 FedNat Holding are associated (or correlated) with HCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCI Group has no effect on the direction of FedNat Holding i.e., FedNat Holding and HCI go up and down completely randomly.
Pair Corralation between FedNat Holding and HCI
If you would invest 11,125 in HCI Group on October 20, 2024 and sell it today you would earn a total of 1,050 from holding HCI Group or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
FedNat Holding vs. HCI Group
Performance |
| Timeline |
| FedNat Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| HCI Group |
FedNat Holding and HCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FedNat Holding and HCI
The main advantage of trading using opposite FedNat Holding and HCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FedNat Holding position performs unexpectedly, HCI 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 HCI will offset losses from the drop in HCI's long position.| FedNat Holding vs. Romana Food Brands | FedNat Holding vs. WK Kellogg Co | FedNat Holding vs. Bilibili | FedNat Holding vs. Bridgford Foods |
| HCI vs. Universal Insurance Holdings | HCI vs. Kingstone Companies | HCI vs. Horace Mann Educators | HCI vs. Heritage Insurance Hldgs |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |