Correlation Between United Fire and 502413BE6
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By analyzing existing cross correlation between United Fire Group and L3 TECHNOLOGIES INC, you can compare the effects of market volatilities on United Fire and 502413BE6 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 502413BE6. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Fire and 502413BE6.
Diversification Opportunities for United Fire and 502413BE6
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and 502413BE6 is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding United Fire Group and L3 TECHNOLOGIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L3 TECHNOLOGIES INC 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 502413BE6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L3 TECHNOLOGIES INC has no effect on the direction of United Fire i.e., United Fire and 502413BE6 go up and down completely randomly.
Pair Corralation between United Fire and 502413BE6
Given the investment horizon of 90 days United Fire Group is expected to generate 4.4 times more return on investment than 502413BE6. However, United Fire is 4.4 times more volatile than L3 TECHNOLOGIES INC. It trades about 0.36 of its potential returns per unit of risk. L3 TECHNOLOGIES INC is currently generating about -0.08 per unit of risk. If you would invest 1,993 in United Fire Group on August 31, 2024 and sell it today you would earn a total of 1,015 from holding United Fire Group or generate 50.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 18.18% |
| Values | Daily Returns |
United Fire Group vs. L3 TECHNOLOGIES INC
Performance |
| Timeline |
| United Fire Group |
| L3 TECHNOLOGIES INC |
United Fire and 502413BE6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Fire and 502413BE6
The main advantage of trading using opposite United Fire and 502413BE6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Fire position performs unexpectedly, 502413BE6 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 502413BE6 will offset losses from the drop in 502413BE6'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 |
| 502413BE6 vs. Willamette Valley Vineyards | 502413BE6 vs. Citizens | 502413BE6 vs. Oatly Group AB | 502413BE6 vs. United Fire Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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