Correlation Between LIFENET INSURANCE and FOX P
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE and FOX P 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 LIFENET INSURANCE and FOX P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and FOX P B, you can compare the effects of market volatilities on LIFENET INSURANCE and FOX P 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 LIFENET INSURANCE with a short position of FOX P. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and FOX P.
Diversification Opportunities for LIFENET INSURANCE and FOX P
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LIFENET and FOX is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and FOX P B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FOX P B and LIFENET 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 LIFENET INSURANCE CO are associated (or correlated) with FOX P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FOX P B has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and FOX P go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and FOX P
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to under-perform the FOX P. In addition to that, LIFENET INSURANCE is 1.13 times more volatile than FOX P B. It trades about -0.06 of its total potential returns per unit of risk. FOX P B is currently generating about 0.11 per unit of volatility. If you would invest 3,920 in FOX P B on September 13, 2024 and sell it today you would earn a total of 180.00 from holding FOX P B or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. FOX P B
Performance |
| Timeline |
| LIFENET INSURANCE |
| FOX P B |
LIFENET INSURANCE and FOX P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and FOX P
The main advantage of trading using opposite LIFENET INSURANCE and FOX P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE position performs unexpectedly, FOX P 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 FOX P will offset losses from the drop in FOX P's long position.| LIFENET INSURANCE vs. Xtrackers LevDAX | LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX |
| FOX P vs. Universal Insurance Holdings | FOX P vs. HANOVER INSURANCE | FOX P vs. DICKS Sporting Goods | FOX P vs. LIFENET INSURANCE CO |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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