Correlation Between Sunedison and United Fire
Can any of the company-specific risk be diversified away by investing in both Sunedison and United Fire 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 Sunedison and United Fire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunedison and United Fire Group, you can compare the effects of market volatilities on Sunedison and United Fire 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 Sunedison with a short position of United Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunedison and United Fire.
Diversification Opportunities for Sunedison and United Fire
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sunedison and United is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sunedison and United Fire Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Fire Group and Sunedison 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 Sunedison are associated (or correlated) with United Fire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Fire Group has no effect on the direction of Sunedison i.e., Sunedison and United Fire go up and down completely randomly.
Pair Corralation between Sunedison and United Fire
Given the investment horizon of 90 days Sunedison is expected to under-perform the United Fire. In addition to that, Sunedison is 2.18 times more volatile than United Fire Group. It trades about -0.16 of its total potential returns per unit of risk. United Fire Group is currently generating about 0.42 per unit of volatility. If you would invest 2,490 in United Fire Group on September 15, 2024 and sell it today you would earn a total of 595.00 from holding United Fire Group or generate 23.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sunedison vs. United Fire Group
Performance |
| Timeline |
| Sunedison |
| United Fire Group |
Sunedison and United Fire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunedison and United Fire
The main advantage of trading using opposite Sunedison and United Fire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunedison position performs unexpectedly, United Fire 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 Fire will offset losses from the drop in United Fire's long position.| Sunedison vs. United Fire Group | Sunedison vs. Pekin Life Insurance | Sunedison vs. Aterian | Sunedison vs. Old Dominion Freight |
| United Fire vs. W R Berkley | United Fire vs. Markel | United Fire vs. RLI Corp | United Fire vs. CNA Financial |
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.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |