Correlation Between Beazley PLC and Peoples Insurance
Can any of the company-specific risk be diversified away by investing in both Beazley PLC and Peoples Insurance 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 Beazley PLC and Peoples Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beazley PLC and The Peoples Insurance, you can compare the effects of market volatilities on Beazley PLC and Peoples Insurance 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 Beazley PLC with a short position of Peoples Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazley PLC and Peoples Insurance.
Diversification Opportunities for Beazley PLC and Peoples Insurance
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Beazley and Peoples is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Beazley PLC and The Peoples Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Insurance and Beazley PLC 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 Beazley PLC are associated (or correlated) with Peoples Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Insurance has no effect on the direction of Beazley PLC i.e., Beazley PLC and Peoples Insurance go up and down completely randomly.
Pair Corralation between Beazley PLC and Peoples Insurance
Assuming the 90 days horizon Beazley PLC is expected to generate 0.94 times more return on investment than Peoples Insurance. However, Beazley PLC is 1.07 times less risky than Peoples Insurance. It trades about 0.01 of its potential returns per unit of risk. The Peoples Insurance is currently generating about -0.08 per unit of risk. If you would invest 920.00 in Beazley PLC on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Beazley PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Beazley PLC vs. The Peoples Insurance
Performance |
| Timeline |
| Beazley PLC |
| Peoples Insurance |
Beazley PLC and Peoples Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beazley PLC and Peoples Insurance
The main advantage of trading using opposite Beazley PLC and Peoples Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazley PLC position performs unexpectedly, Peoples Insurance 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 Peoples Insurance will offset losses from the drop in Peoples Insurance's long position.| Beazley PLC vs. Cal Maine Foods | Beazley PLC vs. COFCO Joycome Foods | Beazley PLC vs. NISSIN FOODS HLDGS | Beazley PLC vs. United Natural Foods |
| Peoples Insurance vs. Tokio Marine Holdings | Peoples Insurance vs. Beazley PLC | Peoples Insurance vs. The Hanover Insurance |
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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