Correlation Between Albertsons Companies and Baldwin Insurance
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies and Baldwin 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 Albertsons Companies and Baldwin Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and The Baldwin Insurance, you can compare the effects of market volatilities on Albertsons Companies and Baldwin 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 Albertsons Companies with a short position of Baldwin Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Baldwin Insurance.
Diversification Opportunities for Albertsons Companies and Baldwin Insurance
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Albertsons and Baldwin is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and The Baldwin Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baldwin Insurance and Albertsons Companies 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 Albertsons Companies are associated (or correlated) with Baldwin Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baldwin Insurance has no effect on the direction of Albertsons Companies i.e., Albertsons Companies and Baldwin Insurance go up and down completely randomly.
Pair Corralation between Albertsons Companies and Baldwin Insurance
Considering the 90-day investment horizon Albertsons Companies is expected to under-perform the Baldwin Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Albertsons Companies is 2.79 times less risky than Baldwin Insurance. The stock trades about -0.01 of its potential returns per unit of risk. The The Baldwin Insurance is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,652 in The Baldwin Insurance on September 12, 2024 and sell it today you would earn a total of 1,580 from holding The Baldwin Insurance or generate 59.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albertsons Companies vs. The Baldwin Insurance
Performance |
| Timeline |
| Albertsons Companies |
| Baldwin Insurance |
Albertsons Companies and Baldwin Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albertsons Companies and Baldwin Insurance
The main advantage of trading using opposite Albertsons Companies and Baldwin Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies position performs unexpectedly, Baldwin 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 Baldwin Insurance will offset losses from the drop in Baldwin Insurance's long position.| Albertsons Companies vs. Sprouts Farmers Market | Albertsons Companies vs. Krispy Kreme | Albertsons Companies vs. Grocery Outlet Holding | Albertsons Companies vs. Weis Markets |
| Baldwin Insurance vs. Albertsons Companies | Baldwin Insurance vs. NH Foods Ltd | Baldwin Insurance vs. Bridgford Foods | Baldwin Insurance vs. Sligro Food Group |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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