Correlation Between BB Seguridade and Assicurazioni Generali
Can any of the company-specific risk be diversified away by investing in both BB Seguridade and Assicurazioni Generali 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 BB Seguridade and Assicurazioni Generali into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BB Seguridade Participacoes and Assicurazioni Generali SpA, you can compare the effects of market volatilities on BB Seguridade and Assicurazioni Generali 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 BB Seguridade with a short position of Assicurazioni Generali. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Seguridade and Assicurazioni Generali.
Diversification Opportunities for BB Seguridade and Assicurazioni Generali
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between BBSEY and Assicurazioni is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding BB Seguridade Participacoes and Assicurazioni Generali SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assicurazioni Generali and BB Seguridade 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 BB Seguridade Participacoes are associated (or correlated) with Assicurazioni Generali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assicurazioni Generali has no effect on the direction of BB Seguridade i.e., BB Seguridade and Assicurazioni Generali go up and down completely randomly.
Pair Corralation between BB Seguridade and Assicurazioni Generali
Assuming the 90 days horizon BB Seguridade Participacoes is expected to under-perform the Assicurazioni Generali. But the pink sheet apears to be less risky and, when comparing its historical volatility, BB Seguridade Participacoes is 1.09 times less risky than Assicurazioni Generali. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Assicurazioni Generali SpA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,411 in Assicurazioni Generali SpA on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Assicurazioni Generali SpA or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Seguridade Participacoes vs. Assicurazioni Generali SpA
Performance |
| Timeline |
| BB Seguridade Partic |
| Assicurazioni Generali |
BB Seguridade and Assicurazioni Generali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Seguridade and Assicurazioni Generali
The main advantage of trading using opposite BB Seguridade and Assicurazioni Generali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Seguridade position performs unexpectedly, Assicurazioni Generali 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 Assicurazioni Generali will offset losses from the drop in Assicurazioni Generali's long position.| BB Seguridade vs. Assicurazioni Generali SpA | BB Seguridade vs. Athene Holding | BB Seguridade vs. ageas SANV | BB Seguridade vs. Athene Holding |
| Assicurazioni Generali vs. AXA SA | Assicurazioni Generali vs. Athene Holding | Assicurazioni Generali vs. Athene Holding | Assicurazioni Generali vs. Arch Capital 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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