Correlation Between Global Indemnity and Peoples Fin
Can any of the company-specific risk be diversified away by investing in both Global Indemnity and Peoples Fin 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 Peoples Fin 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 Peoples Fin, you can compare the effects of market volatilities on Global Indemnity and Peoples Fin 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 Peoples Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Indemnity and Peoples Fin.
Diversification Opportunities for Global Indemnity and Peoples Fin
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Peoples is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Global Indemnity PLC and Peoples Fin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Fin 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 Peoples Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Fin has no effect on the direction of Global Indemnity i.e., Global Indemnity and Peoples Fin go up and down completely randomly.
Pair Corralation between Global Indemnity and Peoples Fin
Given the investment horizon of 90 days Global Indemnity is expected to generate 201.79 times less return on investment than Peoples Fin. But when comparing it to its historical volatility, Global Indemnity PLC is 4.8 times less risky than Peoples Fin. It trades about 0.01 of its potential returns per unit of risk. Peoples Fin is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 4,720 in Peoples Fin on August 24, 2024 and sell it today you would earn a total of 929.00 from holding Peoples Fin or generate 19.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global Indemnity PLC vs. Peoples Fin
Performance |
| Timeline |
| Global Indemnity PLC |
| Peoples Fin |
Global Indemnity and Peoples Fin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Indemnity and Peoples Fin
The main advantage of trading using opposite Global Indemnity and Peoples Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Indemnity position performs unexpectedly, Peoples Fin 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 Peoples Fin will offset losses from the drop in Peoples Fin'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 |
| Peoples Fin vs. Home Federal Bancorp | Peoples Fin vs. Magyar Bancorp | Peoples Fin vs. Finward Bancorp | Peoples Fin vs. Community West Bancshares |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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