Correlation Between Credit Clear and Insurance Australia
Can any of the company-specific risk be diversified away by investing in both Credit Clear and Insurance Australia 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 Credit Clear and Insurance Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Clear and Insurance Australia Group, you can compare the effects of market volatilities on Credit Clear and Insurance Australia 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 Credit Clear with a short position of Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Clear and Insurance Australia.
Diversification Opportunities for Credit Clear and Insurance Australia
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Credit and Insurance is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Credit Clear and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia and Credit Clear 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 Credit Clear are associated (or correlated) with Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of Credit Clear i.e., Credit Clear and Insurance Australia go up and down completely randomly.
Pair Corralation between Credit Clear and Insurance Australia
Assuming the 90 days trading horizon Credit Clear is expected to under-perform the Insurance Australia. In addition to that, Credit Clear is 2.23 times more volatile than Insurance Australia Group. It trades about -0.07 of its total potential returns per unit of risk. Insurance Australia Group is currently generating about 0.08 per unit of volatility. If you would invest 853.00 in Insurance Australia Group on October 30, 2024 and sell it today you would earn a total of 29.00 from holding Insurance Australia Group or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Clear vs. Insurance Australia Group
Performance |
| Timeline |
| Credit Clear |
| Insurance Australia |
Credit Clear and Insurance Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Clear and Insurance Australia
The main advantage of trading using opposite Credit Clear and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Clear position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.| Credit Clear vs. Lendlease Group | Credit Clear vs. Legacy Iron Ore | Credit Clear vs. Vulcan Steel | Credit Clear vs. Treasury Wine Estates |
| Insurance Australia vs. Healthco Healthcare and | Insurance Australia vs. Insignia Financial | Insurance Australia vs. Macquarie Bank Limited | Insurance Australia vs. Oneview Healthcare 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |