Correlation Between REVO INSURANCE and New HopeLimited
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE and New HopeLimited 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 REVO INSURANCE and New HopeLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and New Hope, you can compare the effects of market volatilities on REVO INSURANCE and New HopeLimited 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 REVO INSURANCE with a short position of New HopeLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and New HopeLimited.
Diversification Opportunities for REVO INSURANCE and New HopeLimited
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between REVO and New is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and New Hope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New HopeLimited and REVO 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 REVO INSURANCE SPA are associated (or correlated) with New HopeLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New HopeLimited has no effect on the direction of REVO INSURANCE i.e., REVO INSURANCE and New HopeLimited go up and down completely randomly.
Pair Corralation between REVO INSURANCE and New HopeLimited
Assuming the 90 days horizon REVO INSURANCE SPA is expected to generate 0.51 times more return on investment than New HopeLimited. However, REVO INSURANCE SPA is 1.96 times less risky than New HopeLimited. It trades about 0.12 of its potential returns per unit of risk. New Hope is currently generating about 0.02 per unit of risk. If you would invest 753.00 in REVO INSURANCE SPA on September 4, 2024 and sell it today you would earn a total of 327.00 from holding REVO INSURANCE SPA or generate 43.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. New Hope
Performance |
| Timeline |
| REVO INSURANCE SPA |
| New HopeLimited |
REVO INSURANCE and New HopeLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and New HopeLimited
The main advantage of trading using opposite REVO INSURANCE and New HopeLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE position performs unexpectedly, New HopeLimited 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 New HopeLimited will offset losses from the drop in New HopeLimited's long position.| REVO INSURANCE vs. Alfa Financial Software | REVO INSURANCE vs. AXWAY SOFTWARE EO | REVO INSURANCE vs. National Beverage Corp | REVO INSURANCE vs. ETFS Coffee ETC |
| New HopeLimited vs. Universal Insurance Holdings | New HopeLimited vs. HANOVER INSURANCE | New HopeLimited vs. CompuGroup Medical SE | New HopeLimited vs. REVO INSURANCE SPA |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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