Correlation Between CORNERSTONE INSURANCE and ABBEY MORTGAGE
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By analyzing existing cross correlation between CORNERSTONE INSURANCE PLC and ABBEY MORTGAGE BANK, you can compare the effects of market volatilities on CORNERSTONE INSURANCE and ABBEY MORTGAGE 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 CORNERSTONE INSURANCE with a short position of ABBEY MORTGAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CORNERSTONE INSURANCE and ABBEY MORTGAGE.
Diversification Opportunities for CORNERSTONE INSURANCE and ABBEY MORTGAGE
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CORNERSTONE and ABBEY is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding CORNERSTONE INSURANCE PLC and ABBEY MORTGAGE BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABBEY MORTGAGE BANK and CORNERSTONE 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 CORNERSTONE INSURANCE PLC are associated (or correlated) with ABBEY MORTGAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABBEY MORTGAGE BANK has no effect on the direction of CORNERSTONE INSURANCE i.e., CORNERSTONE INSURANCE and ABBEY MORTGAGE go up and down completely randomly.
Pair Corralation between CORNERSTONE INSURANCE and ABBEY MORTGAGE
Assuming the 90 days trading horizon CORNERSTONE INSURANCE PLC is expected to generate 1.18 times more return on investment than ABBEY MORTGAGE. However, CORNERSTONE INSURANCE is 1.18 times more volatile than ABBEY MORTGAGE BANK. It trades about 0.27 of its potential returns per unit of risk. ABBEY MORTGAGE BANK is currently generating about 0.09 per unit of risk. If you would invest 250.00 in CORNERSTONE INSURANCE PLC on September 13, 2024 and sell it today you would earn a total of 64.00 from holding CORNERSTONE INSURANCE PLC or generate 25.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CORNERSTONE INSURANCE PLC vs. ABBEY MORTGAGE BANK
Performance |
| Timeline |
| CORNERSTONE INSURANCE PLC |
| ABBEY MORTGAGE BANK |
CORNERSTONE INSURANCE and ABBEY MORTGAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CORNERSTONE INSURANCE and ABBEY MORTGAGE
The main advantage of trading using opposite CORNERSTONE INSURANCE and ABBEY MORTGAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CORNERSTONE INSURANCE position performs unexpectedly, ABBEY MORTGAGE 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 ABBEY MORTGAGE will offset losses from the drop in ABBEY MORTGAGE's long position.| CORNERSTONE INSURANCE vs. GUINEA INSURANCE PLC | CORNERSTONE INSURANCE vs. SECURE ELECTRONIC TECHNOLOGY | CORNERSTONE INSURANCE vs. VFD GROUP | CORNERSTONE INSURANCE vs. IKEJA HOTELS PLC |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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