Correlation Between Conifer Holding and HCI

Can any of the company-specific risk be diversified away by investing in both Conifer Holding and HCI 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 Conifer Holding and HCI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Conifer Holding and HCI Group, you can compare the effects of market volatilities on Conifer Holding and HCI 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 Conifer Holding with a short position of HCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conifer Holding and HCI.

Diversification Opportunities for Conifer Holding and HCI

0.11

Correlation Coefficient

Conifer Holding  HCI

Average diversification

The 3 months correlation between Conifer and HCI is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Conifer Holding and HCI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HCI Group and Conifer Holding 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 Conifer Holding are associated (or correlated) with HCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HCI Group has no effect on the direction of Conifer Holding i.e., Conifer Holding and HCI go up and down completely randomly.

Pair Corralation between Conifer Holding and HCI

Given the investment horizon of 90 days Conifer Holding is expected to under-perform the HCI. In addition to that, Conifer Holding is 1.38 times more volatile than HCI Group. It trades about -0.03 of its total potential returns per unit of risk. HCI Group is currently generating about 0.03 per unit of volatility. If you would invest  11,103  in HCI Group on October 10, 2024 and sell it today you would earn a total of  354.00  from holding HCI Group or generate 3.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Conifer Holding  vs.  HCI Group

Conifer Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conifer Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Conifer Holding is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

HCI Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HCI Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, HCI is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Conifer Holding and HCI

The main advantage of trading using opposite Conifer Holding and HCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conifer Holding position performs unexpectedly, HCI 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 HCI will offset losses from the drop in HCI's long position.

The idea behind Conifer Holding and HCI Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.