Correlation Between United Fire and ESGEN Acquisition
Can any of the company-specific risk be diversified away by investing in both United Fire and ESGEN Acquisition 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 United Fire and ESGEN Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Fire Group and ESGEN Acquisition Corp, you can compare the effects of market volatilities on United Fire and ESGEN Acquisition 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 United Fire with a short position of ESGEN Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Fire and ESGEN Acquisition.
Diversification Opportunities for United Fire and ESGEN Acquisition
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and ESGEN is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding United Fire Group and ESGEN Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESGEN Acquisition Corp and United Fire 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 United Fire Group are associated (or correlated) with ESGEN Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESGEN Acquisition Corp has no effect on the direction of United Fire i.e., United Fire and ESGEN Acquisition go up and down completely randomly.
Pair Corralation between United Fire and ESGEN Acquisition
If you would invest 2,044 in United Fire Group on August 26, 2024 and sell it today you would earn a total of 945.00 from holding United Fire Group or generate 46.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
United Fire Group vs. ESGEN Acquisition Corp
Performance |
| Timeline |
| United Fire Group |
| ESGEN Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Fire and ESGEN Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Fire and ESGEN Acquisition
The main advantage of trading using opposite United Fire and ESGEN Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Fire position performs unexpectedly, ESGEN Acquisition 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 ESGEN Acquisition will offset losses from the drop in ESGEN Acquisition's long position.| United Fire vs. Donegal Group B | United Fire vs. Horace Mann Educators | United Fire vs. Donegal Group A | United Fire vs. Global Indemnity PLC |
| ESGEN Acquisition vs. United Fire Group | ESGEN Acquisition vs. Palomar Holdings | ESGEN Acquisition vs. Old Republic International | ESGEN Acquisition vs. Aspen Insurance Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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