Correlation Between Ecclesiastical Insurance and Cornish Metals
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical Insurance and Cornish Metals 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 Cornish Metals 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 Cornish Metals, you can compare the effects of market volatilities on Ecclesiastical Insurance and Cornish Metals 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 Cornish Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and Cornish Metals.
Diversification Opportunities for Ecclesiastical Insurance and Cornish Metals
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ecclesiastical and Cornish is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic and Cornish Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornish Metals 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 Cornish Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornish Metals has no effect on the direction of Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Cornish Metals go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and Cornish Metals
Assuming the 90 days trading horizon Ecclesiastical Insurance Office is expected to generate 0.28 times more return on investment than Cornish Metals. However, Ecclesiastical Insurance Office is 3.62 times less risky than Cornish Metals. It trades about -0.02 of its potential returns per unit of risk. Cornish Metals is currently generating about -0.11 per unit of risk. If you would invest 13,500 in Ecclesiastical Insurance Office on August 30, 2024 and sell it today you would lose (100.00) from holding Ecclesiastical Insurance Office or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. Cornish Metals
Performance |
| Timeline |
| Ecclesiastical Insurance |
| Cornish Metals |
Ecclesiastical Insurance and Cornish Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and Cornish Metals
The main advantage of trading using opposite Ecclesiastical Insurance and Cornish Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance position performs unexpectedly, Cornish Metals 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 Cornish Metals will offset losses from the drop in Cornish Metals' long position.| Ecclesiastical Insurance vs. Samsung Electronics Co | Ecclesiastical Insurance vs. Samsung Electronics Co | Ecclesiastical Insurance vs. Hyundai Motor | Ecclesiastical Insurance vs. Toyota Motor Corp |
| Cornish Metals vs. CNH Industrial NV | Cornish Metals vs. Central Asia Metals | Cornish Metals vs. McEwen Mining | Cornish Metals vs. Solstad Offshore ASA |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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