Correlation Between Addtech AB and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both Addtech AB and Safety 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 Addtech AB and Safety Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addtech AB and Safety Insurance Group, you can compare the effects of market volatilities on Addtech AB and Safety 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 Addtech AB with a short position of Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addtech AB and Safety Insurance.
Diversification Opportunities for Addtech AB and Safety Insurance
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Addtech and Safety is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Addtech AB and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance and Addtech AB 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 Addtech AB are associated (or correlated) with Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of Addtech AB i.e., Addtech AB and Safety Insurance go up and down completely randomly.
Pair Corralation between Addtech AB and Safety Insurance
Assuming the 90 days trading horizon Addtech AB is expected to generate 1.42 times more return on investment than Safety Insurance. However, Addtech AB is 1.42 times more volatile than Safety Insurance Group. It trades about 0.09 of its potential returns per unit of risk. Safety Insurance Group is currently generating about 0.02 per unit of risk. If you would invest 1,758 in Addtech AB on November 3, 2024 and sell it today you would earn a total of 1,000.00 from holding Addtech AB or generate 56.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addtech AB vs. Safety Insurance Group
Performance |
| Timeline |
| Addtech AB |
| Safety Insurance |
Addtech AB and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addtech AB and Safety Insurance
The main advantage of trading using opposite Addtech AB and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addtech AB position performs unexpectedly, Safety 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| Addtech AB vs. Monster Beverage Corp | Addtech AB vs. Molson Coors Beverage | Addtech AB vs. Shin Etsu Chemical Co | Addtech AB vs. X FAB Silicon Foundries |
| Safety Insurance vs. PICC Property and | Safety Insurance vs. Cincinnati Financial | Safety Insurance vs. QBE Insurance Group | Safety Insurance vs. Admiral Group plc |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |