Correlation Between Ecclesiastical Insurance and Thales
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical Insurance and Thales 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 Ecclesiastical Insurance and Thales into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecclesiastical Insurance Office and Thales, you can compare the effects of market volatilities on Ecclesiastical Insurance and Thales 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 Ecclesiastical Insurance with a short position of Thales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and Thales.
Diversification Opportunities for Ecclesiastical Insurance and Thales
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ecclesiastical and Thales is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic and Thales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thales and Ecclesiastical 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 Ecclesiastical Insurance Office are associated (or correlated) with Thales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thales has no effect on the direction of Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Thales go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and Thales
Assuming the 90 days trading horizon Ecclesiastical Insurance Office is expected to generate 0.54 times more return on investment than Thales. However, Ecclesiastical Insurance Office is 1.85 times less risky than Thales. It trades about 0.06 of its potential returns per unit of risk. Thales is currently generating about 0.02 per unit of risk. If you would invest 11,945 in Ecclesiastical Insurance Office on September 4, 2024 and sell it today you would earn a total of 1,505 from holding Ecclesiastical Insurance Office or generate 12.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. Thales
Performance |
| Timeline |
| Ecclesiastical Insurance |
| Thales |
Ecclesiastical Insurance and Thales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and Thales
The main advantage of trading using opposite Ecclesiastical Insurance and Thales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance position performs unexpectedly, Thales 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 Thales will offset losses from the drop in Thales' long position.| Ecclesiastical Insurance vs. Walmart | Ecclesiastical Insurance vs. BYD Co | Ecclesiastical Insurance vs. Volkswagen AG | Ecclesiastical Insurance vs. Volkswagen AG Non Vtg |
| Thales vs. Ecclesiastical Insurance Office | Thales vs. Zurich Insurance Group | Thales vs. Beowulf Mining | Thales vs. Lundin Mining Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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