Correlation Between United Fire and Lion One
Can any of the company-specific risk be diversified away by investing in both United Fire and Lion One 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 Lion One 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 Lion One Metals, you can compare the effects of market volatilities on United Fire and Lion One 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 Lion One. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Fire and Lion One.
Diversification Opportunities for United Fire and Lion One
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Lion is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding United Fire Group and Lion One Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion One Metals 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 Lion One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion One Metals has no effect on the direction of United Fire i.e., United Fire and Lion One go up and down completely randomly.
Pair Corralation between United Fire and Lion One
Given the investment horizon of 90 days United Fire Group is expected to generate 0.62 times more return on investment than Lion One. However, United Fire Group is 1.6 times less risky than Lion One. It trades about 0.05 of its potential returns per unit of risk. Lion One Metals is currently generating about -0.04 per unit of risk. If you would invest 2,242 in United Fire Group on September 1, 2024 and sell it today you would earn a total of 818.00 from holding United Fire Group or generate 36.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Fire Group vs. Lion One Metals
Performance |
| Timeline |
| United Fire Group |
| Lion One Metals |
United Fire and Lion One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Fire and Lion One
The main advantage of trading using opposite United Fire and Lion One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Fire position performs unexpectedly, Lion One 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 Lion One will offset losses from the drop in Lion One'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 |
| Lion One vs. Irving Resources | Lion One vs. Headwater Gold | Lion One vs. Novo Resources Corp | Lion One vs. Snowline Gold Corp |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |