Correlation Between Fiverr International and Global Indemnity
Can any of the company-specific risk be diversified away by investing in both Fiverr International and Global Indemnity 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 Fiverr International and Global Indemnity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiverr International and Global Indemnity PLC, you can compare the effects of market volatilities on Fiverr International and Global Indemnity 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 Fiverr International with a short position of Global Indemnity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiverr International and Global Indemnity.
Diversification Opportunities for Fiverr International and Global Indemnity
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fiverr and Global is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fiverr International and Global Indemnity PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Indemnity PLC and Fiverr International 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 Fiverr International are associated (or correlated) with Global Indemnity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Indemnity PLC has no effect on the direction of Fiverr International i.e., Fiverr International and Global Indemnity go up and down completely randomly.
Pair Corralation between Fiverr International and Global Indemnity
Given the investment horizon of 90 days Fiverr International is expected to generate 2.47 times more return on investment than Global Indemnity. However, Fiverr International is 2.47 times more volatile than Global Indemnity PLC. It trades about 0.21 of its potential returns per unit of risk. Global Indemnity PLC is currently generating about 0.29 per unit of risk. If you would invest 2,916 in Fiverr International on August 31, 2024 and sell it today you would earn a total of 367.00 from holding Fiverr International or generate 12.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fiverr International vs. Global Indemnity PLC
Performance |
| Timeline |
| Fiverr International |
| Global Indemnity PLC |
Fiverr International and Global Indemnity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fiverr International and Global Indemnity
The main advantage of trading using opposite Fiverr International and Global Indemnity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiverr International position performs unexpectedly, Global Indemnity 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 Global Indemnity will offset losses from the drop in Global Indemnity's long position.| Fiverr International vs. Snap Inc | Fiverr International vs. Twilio Inc | Fiverr International vs. Spotify Technology SA | Fiverr International vs. Baidu Inc |
| Global Indemnity vs. Progressive Corp | Global Indemnity vs. Chubb | Global Indemnity vs. The Allstate | Global Indemnity vs. Kemper |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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