Correlation Between Flagship Investments and Insignia Financial
Can any of the company-specific risk be diversified away by investing in both Flagship Investments and Insignia Financial 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 Flagship Investments and Insignia Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flagship Investments and Insignia Financial, you can compare the effects of market volatilities on Flagship Investments and Insignia Financial 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 Flagship Investments with a short position of Insignia Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Investments and Insignia Financial.
Diversification Opportunities for Flagship Investments and Insignia Financial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flagship and Insignia is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments and Insignia Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insignia Financial and Flagship Investments 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 Flagship Investments are associated (or correlated) with Insignia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insignia Financial has no effect on the direction of Flagship Investments i.e., Flagship Investments and Insignia Financial go up and down completely randomly.
Pair Corralation between Flagship Investments and Insignia Financial
Assuming the 90 days trading horizon Flagship Investments is expected to generate 0.63 times more return on investment than Insignia Financial. However, Flagship Investments is 1.6 times less risky than Insignia Financial. It trades about 0.04 of its potential returns per unit of risk. Insignia Financial is currently generating about 0.03 per unit of risk. If you would invest 170.00 in Flagship Investments on September 15, 2024 and sell it today you would earn a total of 50.00 from holding Flagship Investments or generate 29.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flagship Investments vs. Insignia Financial
Performance |
| Timeline |
| Flagship Investments |
| Insignia Financial |
Flagship Investments and Insignia Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flagship Investments and Insignia Financial
The main advantage of trading using opposite Flagship Investments and Insignia Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments position performs unexpectedly, Insignia Financial 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 Insignia Financial will offset losses from the drop in Insignia Financial's long position.| Flagship Investments vs. Red Hill Iron | Flagship Investments vs. Hawsons Iron | Flagship Investments vs. A1 Investments Resources | Flagship Investments vs. Aeris Environmental |
| Insignia Financial vs. Black Rock Mining | Insignia Financial vs. REGAL ASIAN INVESTMENTS | Insignia Financial vs. National Storage REIT | Insignia Financial vs. Flagship Investments |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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