Correlation Between United Insurance and JS Global

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

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

Diversification Opportunities for United Insurance and JS Global

-0.56

Correlation Coefficient

United Insurance  JS Global

Excellent diversification

The 3 months correlation between United and JSGBETF is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance and JS Global Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JS Global Banking 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 JS Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JS Global Banking has no effect on the direction of United Insurance i.e., United Insurance and JS Global go up and down completely randomly.

Pair Corralation between United Insurance and JS Global

Assuming the 90 days trading horizon United Insurance is expected to generate 0.62 times more return on investment than JS Global. However, United Insurance is 1.61 times less risky than JS Global. It trades about 0.1 of its potential returns per unit of risk. JS Global Banking is currently generating about -0.05 per unit of risk. If you would invest  1,576  in United Insurance on December 4, 2024 and sell it today you would earn a total of  176.00  from holding United Insurance or generate 11.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

United Insurance  vs.  JS Global Banking

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 conflicting basic indicators, United Insurance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

JS Global Banking

Risk-Adjusted Performance

Very Weak

Over the last 90 days JS Global Banking has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with United Insurance and JS Global

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

The idea behind United Insurance and JS Global Banking 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.