Correlation Between United Insurance and Grays Leasing
Can any of the company-specific risk be diversified away by investing in both United Insurance and Grays Leasing 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 Insurance and Grays Leasing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Insurance and Grays Leasing, you can compare the effects of market volatilities on United Insurance and Grays Leasing 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 Insurance with a short position of Grays Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Grays Leasing.
Diversification Opportunities for United Insurance and Grays Leasing
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Grays is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance and Grays Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grays Leasing and United Insurance 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 Insurance are associated (or correlated) with Grays Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grays Leasing has no effect on the direction of United Insurance i.e., United Insurance and Grays Leasing go up and down completely randomly.
Pair Corralation between United Insurance and Grays Leasing
Assuming the 90 days trading horizon United Insurance is expected to generate 0.42 times more return on investment than Grays Leasing. However, United Insurance is 2.38 times less risky than Grays Leasing. It trades about 0.13 of its potential returns per unit of risk. Grays Leasing is currently generating about 0.04 per unit of risk. If you would invest 1,126 in United Insurance on September 2, 2024 and sell it today you would earn a total of 460.00 from holding United Insurance or generate 40.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.87% |
| Values | Daily Returns |
United Insurance vs. Grays Leasing
Performance |
| Timeline |
| United Insurance |
| Grays Leasing |
United Insurance and Grays Leasing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Grays Leasing
The main advantage of trading using opposite United Insurance and Grays Leasing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Grays Leasing 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 Grays Leasing will offset losses from the drop in Grays Leasing's long position.| United Insurance vs. Habib Bank | United Insurance vs. National Bank of | United Insurance vs. United Bank | United Insurance vs. MCB Bank |
| Grays Leasing vs. MCB Investment Manag | Grays Leasing vs. 786 Investment Limited | Grays Leasing vs. Air Link Communication | Grays Leasing vs. JS Investments |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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