Correlation Between Ecclesiastical Insurance and Coloplast
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical Insurance and Coloplast 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 Coloplast 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 Coloplast AS, you can compare the effects of market volatilities on Ecclesiastical Insurance and Coloplast 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 Coloplast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and Coloplast.
Diversification Opportunities for Ecclesiastical Insurance and Coloplast
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ecclesiastical and Coloplast is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic and Coloplast AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coloplast AS 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 Coloplast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coloplast AS has no effect on the direction of Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Coloplast go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and Coloplast
Assuming the 90 days trading horizon Ecclesiastical Insurance is expected to generate 20.9 times less return on investment than Coloplast. In addition to that, Ecclesiastical Insurance is 1.49 times more volatile than Coloplast AS. It trades about 0.0 of its total potential returns per unit of risk. Coloplast AS is currently generating about 0.13 per unit of volatility. If you would invest 79,040 in Coloplast AS on October 20, 2024 and sell it today you would earn a total of 1,270 from holding Coloplast AS or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. Coloplast AS
Performance |
| Timeline |
| Ecclesiastical Insurance |
| Coloplast AS |
Ecclesiastical Insurance and Coloplast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and Coloplast
The main advantage of trading using opposite Ecclesiastical Insurance and Coloplast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance position performs unexpectedly, Coloplast 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 Coloplast will offset losses from the drop in Coloplast's long position.The idea behind Ecclesiastical Insurance Office and Coloplast AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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