Correlation Between PEH WERTPAPIER and United Insurance
Can any of the company-specific risk be diversified away by investing in both PEH WERTPAPIER 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 PEH WERTPAPIER and United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PEH WERTPAPIER and United Insurance Holdings, you can compare the effects of market volatilities on PEH WERTPAPIER 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 PEH WERTPAPIER with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PEH WERTPAPIER and United Insurance.
Diversification Opportunities for PEH WERTPAPIER and United Insurance
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PEH and United is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding PEH WERTPAPIER 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 PEH WERTPAPIER 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 PEH WERTPAPIER 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 PEH WERTPAPIER i.e., PEH WERTPAPIER and United Insurance go up and down completely randomly.
Pair Corralation between PEH WERTPAPIER and United Insurance
Assuming the 90 days trading horizon PEH WERTPAPIER is expected to generate 0.52 times more return on investment than United Insurance. However, PEH WERTPAPIER is 1.91 times less risky than United Insurance. It trades about 0.13 of its potential returns per unit of risk. United Insurance Holdings is currently generating about -0.02 per unit of risk. If you would invest 2,160 in PEH WERTPAPIER on November 3, 2024 and sell it today you would earn a total of 140.00 from holding PEH WERTPAPIER or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PEH WERTPAPIER vs. United Insurance Holdings
Performance |
| Timeline |
| PEH WERTPAPIER |
| United Insurance Holdings |
PEH WERTPAPIER and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PEH WERTPAPIER and United Insurance
The main advantage of trading using opposite PEH WERTPAPIER and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PEH WERTPAPIER 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.| PEH WERTPAPIER vs. Apple Inc | PEH WERTPAPIER vs. Apple Inc | PEH WERTPAPIER vs. Apple Inc | PEH WERTPAPIER vs. Apple Inc |
| United Insurance vs. Take Two Interactive Software | United Insurance vs. Beta Systems Software | United Insurance vs. Easy Software AG | United Insurance vs. ASURE 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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