Correlation Between United Insurance and Packages
Can any of the company-specific risk be diversified away by investing in both United Insurance and Packages 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 Packages into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Insurance and Packages, you can compare the effects of market volatilities on United Insurance and Packages 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 Packages. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Packages.
Diversification Opportunities for United Insurance and Packages
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Packages is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance and Packages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Packages 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 Packages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Packages has no effect on the direction of United Insurance i.e., United Insurance and Packages go up and down completely randomly.
Pair Corralation between United Insurance and Packages
Assuming the 90 days trading horizon United Insurance is expected to generate 1.13 times more return on investment than Packages. However, United Insurance is 1.13 times more volatile than Packages. It trades about 0.21 of its potential returns per unit of risk. Packages is currently generating about 0.0 per unit of risk. If you would invest 1,630 in United Insurance on November 28, 2024 and sell it today you would earn a total of 168.00 from holding United Insurance or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance vs. Packages
Performance |
| Timeline |
| United Insurance |
| Packages |
United Insurance and Packages Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Packages
The main advantage of trading using opposite United Insurance and Packages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, Packages 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 Packages will offset losses from the drop in Packages' long position.| United Insurance vs. National Foods | United Insurance vs. Sindh Modaraba Management | United Insurance vs. Standard Chartered Bank | United Insurance vs. Shaheen Insurance |
| Packages vs. Metropolitan Steel Corp | Packages vs. Standard Chartered Bank | Packages vs. National Bank of | Packages vs. Orient Rental Modaraba |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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