Correlation Between United Insurance and COMPASS MINERALS
Can any of the company-specific risk be diversified away by investing in both United Insurance and COMPASS MINERALS 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 COMPASS MINERALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Insurance Holdings and COMPASS MINERALS, you can compare the effects of market volatilities on United Insurance and COMPASS MINERALS 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 COMPASS MINERALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and COMPASS MINERALS.
Diversification Opportunities for United Insurance and COMPASS MINERALS
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between United and COMPASS is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and COMPASS MINERALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPASS MINERALS 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 Holdings are associated (or correlated) with COMPASS MINERALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPASS MINERALS has no effect on the direction of United Insurance i.e., United Insurance and COMPASS MINERALS go up and down completely randomly.
Pair Corralation between United Insurance and COMPASS MINERALS
Assuming the 90 days horizon United Insurance Holdings is expected to under-perform the COMPASS MINERALS. But the stock apears to be less risky and, when comparing its historical volatility, United Insurance Holdings is 1.73 times less risky than COMPASS MINERALS. The stock trades about -0.14 of its potential returns per unit of risk. The COMPASS MINERALS is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,050 in COMPASS MINERALS on October 26, 2024 and sell it today you would earn a total of 200.00 from holding COMPASS MINERALS or generate 19.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 94.74% |
Values | Daily Returns |
United Insurance Holdings vs. COMPASS MINERALS
Performance |
Timeline |
United Insurance Holdings |
COMPASS MINERALS |
United Insurance and COMPASS MINERALS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Insurance and COMPASS MINERALS
The main advantage of trading using opposite United Insurance and COMPASS MINERALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance position performs unexpectedly, COMPASS MINERALS 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 COMPASS MINERALS will offset losses from the drop in COMPASS MINERALS's long position.United Insurance vs. PICC Property and | United Insurance vs. Fairfax Financial Holdings | United Insurance vs. QBE Insurance Group | United Insurance vs. Insurance Australia Group |
COMPASS MINERALS vs. ETFS Coffee ETC | COMPASS MINERALS vs. Webster Financial | COMPASS MINERALS vs. UNIQA INSURANCE GR | COMPASS MINERALS vs. Luckin Coffee |
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.
Other Complementary Tools
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |