Correlation Between AWILCO DRILLING and Insurance Australia
Can any of the company-specific risk be diversified away by investing in both AWILCO DRILLING and Insurance Australia 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 AWILCO DRILLING and Insurance Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AWILCO DRILLING PLC and Insurance Australia Group, you can compare the effects of market volatilities on AWILCO DRILLING and Insurance Australia 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 AWILCO DRILLING with a short position of Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of AWILCO DRILLING and Insurance Australia.
Diversification Opportunities for AWILCO DRILLING and Insurance Australia
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AWILCO and Insurance is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding AWILCO DRILLING PLC and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia and AWILCO DRILLING 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 AWILCO DRILLING PLC are associated (or correlated) with Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of AWILCO DRILLING i.e., AWILCO DRILLING and Insurance Australia go up and down completely randomly.
Pair Corralation between AWILCO DRILLING and Insurance Australia
Assuming the 90 days trading horizon AWILCO DRILLING PLC is expected to under-perform the Insurance Australia. In addition to that, AWILCO DRILLING is 21.22 times more volatile than Insurance Australia Group. It trades about -0.19 of its total potential returns per unit of risk. Insurance Australia Group is currently generating about 0.01 per unit of volatility. If you would invest 426.00 in Insurance Australia Group on January 16, 2025 and sell it today you would earn a total of 0.00 from holding Insurance Australia Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AWILCO DRILLING PLC vs. Insurance Australia Group
Performance |
| Timeline |
| AWILCO DRILLING PLC |
| Insurance Australia |
AWILCO DRILLING and Insurance Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AWILCO DRILLING and Insurance Australia
The main advantage of trading using opposite AWILCO DRILLING and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AWILCO DRILLING position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.| AWILCO DRILLING vs. Apple Inc | AWILCO DRILLING vs. Apple Inc | AWILCO DRILLING vs. Apple Inc | AWILCO DRILLING vs. Apple Inc |
| Insurance Australia vs. PennyMac Mortgage Investment | Insurance Australia vs. Ming Le Sports | Insurance Australia vs. EAT WELL INVESTMENT | Insurance Australia vs. Guangdong Investment Limited |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |