Correlation Between Steadfast Group and Arthur J
Can any of the company-specific risk be diversified away by investing in both Steadfast Group and Arthur J 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 Steadfast Group and Arthur J into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steadfast Group Limited and Arthur J Gallagher, you can compare the effects of market volatilities on Steadfast Group and Arthur J 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 Steadfast Group with a short position of Arthur J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steadfast Group and Arthur J.
Diversification Opportunities for Steadfast Group and Arthur J
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steadfast and Arthur is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Steadfast Group Limited and Arthur J Gallagher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthur J Gallagher and Steadfast Group 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 Steadfast Group Limited are associated (or correlated) with Arthur J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthur J Gallagher has no effect on the direction of Steadfast Group i.e., Steadfast Group and Arthur J go up and down completely randomly.
Pair Corralation between Steadfast Group and Arthur J
Assuming the 90 days horizon Steadfast Group is expected to generate 3.63 times less return on investment than Arthur J. In addition to that, Steadfast Group is 1.14 times more volatile than Arthur J Gallagher. It trades about 0.02 of its total potential returns per unit of risk. Arthur J Gallagher is currently generating about 0.07 per unit of volatility. If you would invest 17,435 in Arthur J Gallagher on October 26, 2024 and sell it today you would earn a total of 9,855 from holding Arthur J Gallagher or generate 56.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steadfast Group Limited vs. Arthur J Gallagher
Performance |
| Timeline |
| Steadfast Group |
| Arthur J Gallagher |
Steadfast Group and Arthur J Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steadfast Group and Arthur J
The main advantage of trading using opposite Steadfast Group and Arthur J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steadfast Group position performs unexpectedly, Arthur J 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 Arthur J will offset losses from the drop in Arthur J's long position.| Steadfast Group vs. Compugroup Medical SE | Steadfast Group vs. Elmos Semiconductor SE | Steadfast Group vs. IMAGIN MEDICAL INC | Steadfast Group vs. Semiconductor Manufacturing International |
| Arthur J vs. NAKED WINES PLC | Arthur J vs. Peijia Medical Limited | Arthur J vs. Broadcom | Arthur J vs. PULSION Medical Systems |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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