Correlation Between United Fire and Silo Pharma
Can any of the company-specific risk be diversified away by investing in both United Fire and Silo Pharma 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 Silo Pharma 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 Silo Pharma, you can compare the effects of market volatilities on United Fire and Silo Pharma 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 Silo Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Fire and Silo Pharma.
Diversification Opportunities for United Fire and Silo Pharma
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Silo is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding United Fire Group and Silo Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silo Pharma 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 Silo Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silo Pharma has no effect on the direction of United Fire i.e., United Fire and Silo Pharma go up and down completely randomly.
Pair Corralation between United Fire and Silo Pharma
Given the investment horizon of 90 days United Fire Group is expected to generate 0.28 times more return on investment than Silo Pharma. However, United Fire Group is 3.59 times less risky than Silo Pharma. It trades about 0.05 of its potential returns per unit of risk. Silo Pharma is currently generating about 0.01 per unit of risk. If you would invest 2,160 in United Fire Group on September 12, 2024 and sell it today you would earn a total of 915.00 from holding United Fire Group or generate 42.36% 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. Silo Pharma
Performance |
| Timeline |
| United Fire Group |
| Silo Pharma |
United Fire and Silo Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Fire and Silo Pharma
The main advantage of trading using opposite United Fire and Silo Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Fire position performs unexpectedly, Silo Pharma 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 Silo Pharma will offset losses from the drop in Silo Pharma'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 |
| Silo Pharma vs. Protagenic Therapeutics | Silo Pharma vs. Rezolute | Silo Pharma vs. Lumos Pharma | Silo Pharma vs. Anebulo Pharmaceuticals |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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