Correlation Between STEEL DYNAMICS and United Insurance
Can any of the company-specific risk be diversified away by investing in both STEEL DYNAMICS 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 STEEL DYNAMICS and United Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STEEL DYNAMICS and United Insurance Holdings, you can compare the effects of market volatilities on STEEL DYNAMICS 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 STEEL DYNAMICS with a short position of United Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of STEEL DYNAMICS and United Insurance.
Diversification Opportunities for STEEL DYNAMICS and United Insurance
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between STEEL and United is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding STEEL DYNAMICS 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 STEEL DYNAMICS 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 STEEL DYNAMICS 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 STEEL DYNAMICS i.e., STEEL DYNAMICS and United Insurance go up and down completely randomly.
Pair Corralation between STEEL DYNAMICS and United Insurance
Assuming the 90 days trading horizon STEEL DYNAMICS is expected to generate 6.74 times less return on investment than United Insurance. But when comparing it to its historical volatility, STEEL DYNAMICS is 1.63 times less risky than United Insurance. It trades about 0.01 of its potential returns per unit of risk. United Insurance Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 912.00 in United Insurance Holdings on November 3, 2024 and sell it today you would earn a total of 278.00 from holding United Insurance Holdings or generate 30.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STEEL DYNAMICS vs. United Insurance Holdings
Performance |
| Timeline |
| STEEL DYNAMICS |
| United Insurance Holdings |
STEEL DYNAMICS and United Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STEEL DYNAMICS and United Insurance
The main advantage of trading using opposite STEEL DYNAMICS and United Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STEEL DYNAMICS 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.| STEEL DYNAMICS vs. TAL Education Group | STEEL DYNAMICS vs. X FAB Silicon Foundries | STEEL DYNAMICS vs. Xinhua Winshare Publishing | STEEL DYNAMICS vs. Strategic Education |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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