Correlation Between United Fire and Tefron
Can any of the company-specific risk be diversified away by investing in both United Fire and Tefron 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 Tefron 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 Tefron, you can compare the effects of market volatilities on United Fire and Tefron 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 Tefron. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Fire and Tefron.
Diversification Opportunities for United Fire and Tefron
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Tefron is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding United Fire Group and Tefron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tefron 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 Tefron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tefron has no effect on the direction of United Fire i.e., United Fire and Tefron go up and down completely randomly.
Pair Corralation between United Fire and Tefron
If you would invest 2,009 in United Fire Group on August 27, 2024 and sell it today you would earn a total of 980.00 from holding United Fire Group or generate 48.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
United Fire Group vs. Tefron
Performance |
| Timeline |
| United Fire Group |
| Tefron |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Fire and Tefron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Fire and Tefron
The main advantage of trading using opposite United Fire and Tefron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Fire position performs unexpectedly, Tefron 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 Tefron will offset losses from the drop in Tefron'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 |
| Tefron vs. GoHealth | Tefron vs. ACG Metals Limited | Tefron vs. United Fire Group | Tefron vs. East Africa Metals |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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