Correlation Between MOBILE FACTORY and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both MOBILE FACTORY and INSURANCE AUST 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 MOBILE FACTORY and INSURANCE AUST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MOBILE FACTORY INC and INSURANCE AUST GRP, you can compare the effects of market volatilities on MOBILE FACTORY and INSURANCE AUST 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 MOBILE FACTORY with a short position of INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOBILE FACTORY and INSURANCE AUST.
Diversification Opportunities for MOBILE FACTORY and INSURANCE AUST
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MOBILE and INSURANCE is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding MOBILE FACTORY INC and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP and MOBILE FACTORY 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 MOBILE FACTORY INC are associated (or correlated) with INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of MOBILE FACTORY i.e., MOBILE FACTORY and INSURANCE AUST go up and down completely randomly.
Pair Corralation between MOBILE FACTORY and INSURANCE AUST
Assuming the 90 days horizon MOBILE FACTORY INC is expected to under-perform the INSURANCE AUST. In addition to that, MOBILE FACTORY is 1.46 times more volatile than INSURANCE AUST GRP. It trades about -0.11 of its total potential returns per unit of risk. INSURANCE AUST GRP is currently generating about 0.05 per unit of volatility. If you would invest 515.00 in INSURANCE AUST GRP on October 30, 2024 and sell it today you would earn a total of 10.00 from holding INSURANCE AUST GRP or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MOBILE FACTORY INC vs. INSURANCE AUST GRP
Performance |
| Timeline |
| MOBILE FACTORY INC |
| INSURANCE AUST GRP |
MOBILE FACTORY and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MOBILE FACTORY and INSURANCE AUST
The main advantage of trading using opposite MOBILE FACTORY and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MOBILE FACTORY position performs unexpectedly, INSURANCE AUST 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 AUST will offset losses from the drop in INSURANCE AUST's long position.| MOBILE FACTORY vs. Entravision Communications | MOBILE FACTORY vs. CITIC Telecom International | MOBILE FACTORY vs. CONTAGIOUS GAMING INC | MOBILE FACTORY vs. Highlight Communications AG |
| INSURANCE AUST vs. Cairo Communication SpA | INSURANCE AUST vs. Singapore Telecommunications Limited | INSURANCE AUST vs. Chengdu PUTIAN Telecommunications | INSURANCE AUST vs. TITANIUM TRANSPORTGROUP |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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