Correlation Between Viemed Healthcare and United Fire
Can any of the company-specific risk be diversified away by investing in both Viemed Healthcare and United Fire 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 Viemed Healthcare and United Fire into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viemed Healthcare and United Fire Group, you can compare the effects of market volatilities on Viemed Healthcare and United Fire 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 Viemed Healthcare with a short position of United Fire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and United Fire.
Diversification Opportunities for Viemed Healthcare and United Fire
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Viemed and United is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and United Fire Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Fire Group and Viemed Healthcare 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 Viemed Healthcare are associated (or correlated) with United Fire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Fire Group has no effect on the direction of Viemed Healthcare i.e., Viemed Healthcare and United Fire go up and down completely randomly.
Pair Corralation between Viemed Healthcare and United Fire
Considering the 90-day investment horizon Viemed Healthcare is expected to generate 26.29 times less return on investment than United Fire. But when comparing it to its historical volatility, Viemed Healthcare is 2.73 times less risky than United Fire. It trades about 0.04 of its potential returns per unit of risk. United Fire Group is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 1,954 in United Fire Group on September 1, 2024 and sell it today you would earn a total of 1,106 from holding United Fire Group or generate 56.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viemed Healthcare vs. United Fire Group
Performance |
| Timeline |
| Viemed Healthcare |
| United Fire Group |
Viemed Healthcare and United Fire Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viemed Healthcare and United Fire
The main advantage of trading using opposite Viemed Healthcare and United Fire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare position performs unexpectedly, United Fire 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 United Fire will offset losses from the drop in United Fire's long position.| Viemed Healthcare vs. Profound Medical Corp | Viemed Healthcare vs. Si Bone | Viemed Healthcare vs. Nevro Corp | Viemed Healthcare vs. Paragon 28 |
| United Fire vs. Donegal Group B | United Fire vs. Horace Mann Educators | United Fire vs. Donegal Group A | United Fire vs. Global Indemnity PLC |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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