Correlation Between FedNat Holding and Heritage Insurance
Can any of the company-specific risk be diversified away by investing in both FedNat Holding and Heritage 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 FedNat Holding and Heritage Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FedNat Holding and Heritage Insurance Hldgs, you can compare the effects of market volatilities on FedNat Holding and Heritage 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 FedNat Holding with a short position of Heritage Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FedNat Holding and Heritage Insurance.
Diversification Opportunities for FedNat Holding and Heritage Insurance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FedNat and Heritage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FedNat Holding and Heritage Insurance Hldgs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Insurance Hldgs 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 Heritage Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Insurance Hldgs has no effect on the direction of FedNat Holding i.e., FedNat Holding and Heritage Insurance go up and down completely randomly.
Pair Corralation between FedNat Holding and Heritage Insurance
If you would invest (100.00) in FedNat Holding on October 20, 2024 and sell it today you would earn a total of 100.00 from holding FedNat Holding or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
FedNat Holding vs. Heritage Insurance Hldgs
Performance |
| Timeline |
| FedNat Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Heritage Insurance Hldgs |
FedNat Holding and Heritage Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FedNat Holding and Heritage Insurance
The main advantage of trading using opposite FedNat Holding and Heritage Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FedNat Holding position performs unexpectedly, Heritage 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 Heritage Insurance will offset losses from the drop in Heritage Insurance's long position.| FedNat Holding vs. Romana Food Brands | FedNat Holding vs. WK Kellogg Co | FedNat Holding vs. Bilibili | FedNat Holding vs. Bridgford Foods |
| Heritage Insurance vs. Universal Insurance Holdings | Heritage Insurance vs. Donegal Group B | Heritage Insurance vs. Horace Mann Educators | Heritage Insurance vs. NI Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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