Correlation Between Ecclesiastical Insurance and Bank of Georgia Group PLC
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical Insurance and Bank of Georgia Group PLC 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 Bank of Georgia Group PLC 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 Bank of Georgia, you can compare the effects of market volatilities on Ecclesiastical Insurance and Bank of Georgia Group PLC 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 Bank of Georgia Group PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and Bank of Georgia Group PLC.
Diversification Opportunities for Ecclesiastical Insurance and Bank of Georgia Group PLC
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ecclesiastical and Bank is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic and Bank of Georgia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Georgia Group PLC 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 Bank of Georgia Group PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Georgia Group PLC has no effect on the direction of Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Bank of Georgia Group PLC go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and Bank of Georgia Group PLC
Assuming the 90 days trading horizon Ecclesiastical Insurance is expected to generate 3.89 times less return on investment than Bank of Georgia Group PLC. But when comparing it to its historical volatility, Ecclesiastical Insurance Office is 1.57 times less risky than Bank of Georgia Group PLC. It trades about 0.08 of its potential returns per unit of risk. Bank of Georgia is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 469,000 in Bank of Georgia on December 4, 2024 and sell it today you would earn a total of 44,000 from holding Bank of Georgia or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. Bank of Georgia
Performance |
| Timeline |
| Ecclesiastical Insurance |
| Bank of Georgia Group PLC |
Ecclesiastical Insurance and Bank of Georgia Group PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and Bank of Georgia Group PLC
The main advantage of trading using opposite Ecclesiastical Insurance and Bank of Georgia Group PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance position performs unexpectedly, Bank of Georgia Group PLC 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 Bank of Georgia Group PLC will offset losses from the drop in Bank of Georgia Group PLC's long position.| Ecclesiastical Insurance vs. bet at home AG | Ecclesiastical Insurance vs. Pets at Home | Ecclesiastical Insurance vs. Ion Beam Applications | Ecclesiastical Insurance vs. Datagroup SE |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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