Correlation Between United Insurance and IBL HealthCare

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

By analyzing existing cross correlation between United Insurance and IBL HealthCare, you can compare the effects of market volatilities on United Insurance and IBL HealthCare 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 IBL HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and IBL HealthCare.

Diversification Opportunities for United Insurance and IBL HealthCare

-0.71

Correlation Coefficient

United Insurance  IBL HealthCare

Pay attention - limited upside

The 3 months correlation between United and IBL is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance and IBL HealthCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBL HealthCare 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 IBL HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBL HealthCare has no effect on the direction of United Insurance i.e., United Insurance and IBL HealthCare go up and down completely randomly.

Pair Corralation between United Insurance and IBL HealthCare

Assuming the 90 days trading horizon United Insurance is expected to generate 0.72 times more return on investment than IBL HealthCare. However, United Insurance is 1.39 times less risky than IBL HealthCare. It trades about 0.09 of its potential returns per unit of risk. IBL HealthCare is currently generating about -0.07 per unit of risk. If you would invest  1,583  in United Insurance on December 22, 2024 and sell it today you would earn a total of  155.00  from holding United Insurance or generate 9.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

United Insurance  vs.  IBL HealthCare

United Insurance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United Insurance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, United Insurance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

IBL HealthCare

Risk-Adjusted Performance

Very Weak

Over the last 90 days IBL HealthCare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with United Insurance and IBL HealthCare

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

The idea behind United Insurance and IBL HealthCare 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.