Correlation Between Global Indemnity and MSP Recovery
Can any of the company-specific risk be diversified away by investing in both Global Indemnity and MSP Recovery 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 Global Indemnity and MSP Recovery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Indemnity PLC and MSP Recovery, you can compare the effects of market volatilities on Global Indemnity and MSP Recovery 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 Global Indemnity with a short position of MSP Recovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Indemnity and MSP Recovery.
Diversification Opportunities for Global Indemnity and MSP Recovery
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and MSP is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Global Indemnity PLC and MSP Recovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSP Recovery and Global Indemnity 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 Global Indemnity PLC are associated (or correlated) with MSP Recovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSP Recovery has no effect on the direction of Global Indemnity i.e., Global Indemnity and MSP Recovery go up and down completely randomly.
Pair Corralation between Global Indemnity and MSP Recovery
Given the investment horizon of 90 days Global Indemnity PLC is expected to generate 0.65 times more return on investment than MSP Recovery. However, Global Indemnity PLC is 1.54 times less risky than MSP Recovery. It trades about 0.0 of its potential returns per unit of risk. MSP Recovery is currently generating about -0.33 per unit of risk. If you would invest 3,611 in Global Indemnity PLC on November 4, 2024 and sell it today you would lose (14.00) from holding Global Indemnity PLC or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Global Indemnity PLC vs. MSP Recovery
Performance |
| Timeline |
| Global Indemnity PLC |
| MSP Recovery |
Global Indemnity and MSP Recovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Indemnity and MSP Recovery
The main advantage of trading using opposite Global Indemnity and MSP Recovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Indemnity position performs unexpectedly, MSP Recovery 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 MSP Recovery will offset losses from the drop in MSP Recovery's long position.| Global Indemnity vs. Selective Insurance Group | Global Indemnity vs. Kemper | Global Indemnity vs. Donegal Group B | Global Indemnity vs. Argo Group International |
| MSP Recovery vs. Willamette Valley Vineyards | MSP Recovery vs. Allied Gaming Entertainment | MSP Recovery vs. Roblox Corp | MSP Recovery vs. ScanSource |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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