Correlation Between Dug Technology and Insignia Financial
Can any of the company-specific risk be diversified away by investing in both Dug Technology and Insignia Financial 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 Dug Technology and Insignia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dug Technology and Insignia Financial, you can compare the effects of market volatilities on Dug Technology and Insignia Financial 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 Dug Technology with a short position of Insignia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dug Technology and Insignia Financial.
Diversification Opportunities for Dug Technology and Insignia Financial
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dug and Insignia is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Dug Technology and Insignia Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insignia Financial and Dug Technology 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 Dug Technology are associated (or correlated) with Insignia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insignia Financial has no effect on the direction of Dug Technology i.e., Dug Technology and Insignia Financial go up and down completely randomly.
Pair Corralation between Dug Technology and Insignia Financial
Assuming the 90 days trading horizon Dug Technology is expected to under-perform the Insignia Financial. In addition to that, Dug Technology is 1.05 times more volatile than Insignia Financial. It trades about -0.05 of its total potential returns per unit of risk. Insignia Financial is currently generating about 0.13 per unit of volatility. If you would invest 202.00 in Insignia Financial on October 29, 2024 and sell it today you would earn a total of 255.00 from holding Insignia Financial or generate 126.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dug Technology vs. Insignia Financial
Performance |
| Timeline |
| Dug Technology |
| Insignia Financial |
Dug Technology and Insignia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dug Technology and Insignia Financial
The main advantage of trading using opposite Dug Technology and Insignia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dug Technology position performs unexpectedly, Insignia Financial 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 Insignia Financial will offset losses from the drop in Insignia Financial's long position.| Dug Technology vs. Aneka Tambang Tbk | Dug Technology vs. Woolworths | Dug Technology vs. Commonwealth Bank | Dug Technology vs. BHP Group Limited |
| Insignia Financial vs. Premier Investments | Insignia Financial vs. Mirrabooka Investments | Insignia Financial vs. Embark Education Group | Insignia Financial vs. Clime Investment Management |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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