Correlation Between FANH Old and Reliance Global
Can any of the company-specific risk be diversified away by investing in both FANH Old and Reliance Global 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 FANH Old and Reliance Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FANH Old and Reliance Global Group, you can compare the effects of market volatilities on FANH Old and Reliance Global 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 FANH Old with a short position of Reliance Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of FANH Old and Reliance Global.
Diversification Opportunities for FANH Old and Reliance Global
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FANH and Reliance is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding FANH Old and Reliance Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliance Global Group and FANH Old 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 FANH Old are associated (or correlated) with Reliance Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliance Global Group has no effect on the direction of FANH Old i.e., FANH Old and Reliance Global go up and down completely randomly.
Pair Corralation between FANH Old and Reliance Global
Given the investment horizon of 90 days FANH Old is expected to under-perform the Reliance Global. But the stock apears to be less risky and, when comparing its historical volatility, FANH Old is 2.61 times less risky than Reliance Global. The stock trades about -0.07 of its potential returns per unit of risk. The Reliance Global Group is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 6,035 in Reliance Global Group on November 1, 2024 and sell it today you would lose (5,827) from holding Reliance Global Group or give up 96.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.29% |
| Values | Daily Returns |
FANH Old vs. Reliance Global Group
Performance |
| Timeline |
| FANH Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Reliance Global Group |
FANH Old and Reliance Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FANH Old and Reliance Global
The main advantage of trading using opposite FANH Old and Reliance Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FANH Old position performs unexpectedly, Reliance Global 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 Reliance Global will offset losses from the drop in Reliance Global's long position.| FANH Old vs. Erie Indemnity | FANH Old vs. Crawford Company | FANH Old vs. Crawford Company | FANH Old vs. CorVel Corp |
| Reliance Global vs. Huize Holding | Reliance Global vs. Selectquote | Reliance Global vs. eHealth | Reliance Global vs. GoHealth |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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