Correlation Between HCI and Conifer Holding

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

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

Diversification Opportunities for HCI and Conifer Holding

-0.4

Correlation Coefficient

HCI  Conifer Holding

Very good diversification

The 3 months correlation between HCI and Conifer is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding HCI Group and Conifer Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conifer Holding and HCI 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 HCI Group are associated (or correlated) with Conifer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conifer Holding has no effect on the direction of HCI i.e., HCI and Conifer Holding go up and down completely randomly.

Pair Corralation between HCI and Conifer Holding

Considering the 90-day investment horizon HCI Group is expected to generate 0.65 times more return on investment than Conifer Holding. However, HCI Group is 1.54 times less risky than Conifer Holding. It trades about 0.06 of its potential returns per unit of risk. Conifer Holding is currently generating about -0.07 per unit of risk. If you would invest  11,556  in HCI Group on October 25, 2024 and sell it today you would earn a total of  737.00  from holding HCI Group or generate 6.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

HCI Group  vs.  Conifer Holding

HCI Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HCI Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental indicators, HCI may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with HCI and Conifer Holding

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

The idea behind HCI Group and Conifer Holding 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.