Correlation Between General Insurance and California Software
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By analyzing existing cross correlation between General Insurance and California Software, you can compare the effects of market volatilities on General Insurance and California Software 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 General Insurance with a short position of California Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Insurance and California Software.
Diversification Opportunities for General Insurance and California Software
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between General and California is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding General Insurance and California Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Software and General Insurance 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 General Insurance are associated (or correlated) with California Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Software has no effect on the direction of General Insurance i.e., General Insurance and California Software go up and down completely randomly.
Pair Corralation between General Insurance and California Software
Assuming the 90 days trading horizon General Insurance is expected to generate 0.61 times more return on investment than California Software. However, General Insurance is 1.64 times less risky than California Software. It trades about 0.04 of its potential returns per unit of risk. California Software is currently generating about 0.0 per unit of risk. If you would invest 38,163 in General Insurance on October 18, 2024 and sell it today you would earn a total of 3,352 from holding General Insurance or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Insurance vs. California Software
Performance |
| Timeline |
| General Insurance |
| California Software |
General Insurance and California Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Insurance and California Software
The main advantage of trading using opposite General Insurance and California Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Insurance position performs unexpectedly, California Software 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 California Software will offset losses from the drop in California Software's long position.| General Insurance vs. Transport of | General Insurance vs. Ankit Metal Power | General Insurance vs. Hisar Metal Industries | General Insurance vs. Ratnamani Metals Tubes |
| California Software vs. Hindustan Construction | California Software vs. Bigbloc Construction Limited | California Software vs. STEEL EXCHANGE INDIA | California Software vs. General Insurance |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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