Correlation Between PATTIES FOODS and United Insurance
Can any of the company-specific risk be diversified away by investing in both PATTIES FOODS 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 PATTIES FOODS and United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PATTIES FOODS and United Insurance Holdings, you can compare the effects of market volatilities on PATTIES FOODS 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 PATTIES FOODS with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PATTIES FOODS and United Insurance.
Diversification Opportunities for PATTIES FOODS and United Insurance
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PATTIES and United is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding PATTIES FOODS 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 PATTIES FOODS 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 PATTIES FOODS 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 PATTIES FOODS i.e., PATTIES FOODS and United Insurance go up and down completely randomly.
Pair Corralation between PATTIES FOODS and United Insurance
Assuming the 90 days horizon PATTIES FOODS is expected to under-perform the United Insurance. In addition to that, PATTIES FOODS is 1.97 times more volatile than United Insurance Holdings. It trades about -0.07 of its total potential returns per unit of risk. United Insurance Holdings is currently generating about -0.11 per unit of volatility. If you would invest 1,250 in United Insurance Holdings on November 3, 2024 and sell it today you would lose (60.00) from holding United Insurance Holdings or give up 4.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PATTIES FOODS vs. United Insurance Holdings
Performance |
| Timeline |
| PATTIES FOODS |
| United Insurance Holdings |
PATTIES FOODS and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PATTIES FOODS and United Insurance
The main advantage of trading using opposite PATTIES FOODS and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PATTIES FOODS 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.| PATTIES FOODS vs. Goodyear Tire Rubber | PATTIES FOODS vs. VULCAN MATERIALS | PATTIES FOODS vs. NEWELL RUBBERMAID | PATTIES FOODS vs. SALESFORCE INC CDR |
| United Insurance vs. HYATT HOTELS A | United Insurance vs. BRAEMAR HOTELS RES | United Insurance vs. Sunstone Hotel Investors | United Insurance vs. Park Hotels Resorts |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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