Correlation Between ANGANG STEEL and United Insurance
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL 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 ANGANG STEEL and United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and United Insurance Holdings, you can compare the effects of market volatilities on ANGANG STEEL 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 ANGANG STEEL with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and United Insurance.
Diversification Opportunities for ANGANG STEEL and United Insurance
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between ANGANG and United is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H 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 ANGANG STEEL 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 ANGANG STEEL H 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 ANGANG STEEL i.e., ANGANG STEEL and United Insurance go up and down completely randomly.
Pair Corralation between ANGANG STEEL and United Insurance
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 1.9 times more return on investment than United Insurance. However, ANGANG STEEL is 1.9 times more volatile than United Insurance Holdings. It trades about 0.02 of its potential returns per unit of risk. United Insurance Holdings is currently generating about -0.12 per unit of risk. If you would invest 18.00 in ANGANG STEEL H on October 29, 2024 and sell it today you would earn a total of 0.00 from holding ANGANG STEEL H or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. United Insurance Holdings
Performance |
| Timeline |
| ANGANG STEEL H |
| United Insurance Holdings |
ANGANG STEEL and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and United Insurance
The main advantage of trading using opposite ANGANG STEEL and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL 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.| ANGANG STEEL vs. Wizz Air Holdings | ANGANG STEEL vs. Canadian Utilities Limited | ANGANG STEEL vs. FAIR ISAAC | ANGANG STEEL vs. NORWEGIAN AIR SHUT |
| United Insurance vs. Daito Trust Construction | United Insurance vs. Olympic Steel | United Insurance vs. Sumitomo Mitsui Construction | United Insurance vs. MAANSHAN IRON H |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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