Correlation Between United Fire and Perception Capital
Can any of the company-specific risk be diversified away by investing in both United Fire and Perception Capital 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 Perception Capital 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 Perception Capital Corp, you can compare the effects of market volatilities on United Fire and Perception Capital 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 Perception Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Fire and Perception Capital.
Diversification Opportunities for United Fire and Perception Capital
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Perception is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding United Fire Group and Perception Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perception Capital 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 Perception Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perception Capital Corp has no effect on the direction of United Fire i.e., United Fire and Perception Capital go up and down completely randomly.
Pair Corralation between United Fire and Perception Capital
If you would invest 1,085 in Perception Capital Corp on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Perception Capital Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
United Fire Group vs. Perception Capital Corp
Performance |
| Timeline |
| United Fire Group |
| Perception Capital Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Fire and Perception Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Fire and Perception Capital
The main advantage of trading using opposite United Fire and Perception Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Fire position performs unexpectedly, Perception Capital 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 Perception Capital will offset losses from the drop in Perception Capital'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 |
| Perception Capital vs. Rocky Brands | Perception Capital vs. World Houseware Limited | Perception Capital vs. Coty Inc | Perception Capital vs. Uranium Energy 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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