Correlation Between MSAD INSURANCE and Prosafe SE
Can any of the company-specific risk be diversified away by investing in both MSAD INSURANCE and Prosafe SE 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 MSAD INSURANCE and Prosafe SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSAD INSURANCE and Prosafe SE, you can compare the effects of market volatilities on MSAD INSURANCE and Prosafe SE 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 MSAD INSURANCE with a short position of Prosafe SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSAD INSURANCE and Prosafe SE.
Diversification Opportunities for MSAD INSURANCE and Prosafe SE
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MSAD and Prosafe is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding MSAD INSURANCE and Prosafe SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosafe SE and MSAD 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 MSAD INSURANCE are associated (or correlated) with Prosafe SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosafe SE has no effect on the direction of MSAD INSURANCE i.e., MSAD INSURANCE and Prosafe SE go up and down completely randomly.
Pair Corralation between MSAD INSURANCE and Prosafe SE
Assuming the 90 days trading horizon MSAD INSURANCE is expected to generate 0.21 times more return on investment than Prosafe SE. However, MSAD INSURANCE is 4.87 times less risky than Prosafe SE. It trades about 0.09 of its potential returns per unit of risk. Prosafe SE is currently generating about -0.55 per unit of risk. If you would invest 2,040 in MSAD INSURANCE on September 2, 2024 and sell it today you would earn a total of 60.00 from holding MSAD INSURANCE or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MSAD INSURANCE vs. Prosafe SE
Performance |
| Timeline |
| MSAD INSURANCE |
| Prosafe SE |
MSAD INSURANCE and Prosafe SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSAD INSURANCE and Prosafe SE
The main advantage of trading using opposite MSAD INSURANCE and Prosafe SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSAD INSURANCE position performs unexpectedly, Prosafe SE 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 Prosafe SE will offset losses from the drop in Prosafe SE's long position.| MSAD INSURANCE vs. SIVERS SEMICONDUCTORS AB | MSAD INSURANCE vs. Darden Restaurants | MSAD INSURANCE vs. Reliance Steel Aluminum | MSAD INSURANCE vs. Q2M Managementberatung AG |
| Prosafe SE vs. Tenaris SA | Prosafe SE vs. Superior Plus Corp | Prosafe SE vs. NMI Holdings | Prosafe SE vs. Origin Agritech |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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