Correlation Between Hiscox and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Hiscox and Dairy Farm 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 Hiscox and Dairy Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hiscox and Dairy Farm International, you can compare the effects of market volatilities on Hiscox and Dairy Farm 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 Hiscox with a short position of Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hiscox and Dairy Farm.
Diversification Opportunities for Hiscox and Dairy Farm
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hiscox and Dairy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hiscox and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International and Hiscox 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 Hiscox are associated (or correlated) with Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Hiscox i.e., Hiscox and Dairy Farm go up and down completely randomly.
Pair Corralation between Hiscox and Dairy Farm
If you would invest 109,700 in Hiscox on December 8, 2024 and sell it today you would earn a total of 5,700 from holding Hiscox or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hiscox vs. Dairy Farm International
Performance |
| Timeline |
| Hiscox |
| Dairy Farm International |
Hiscox and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hiscox and Dairy Farm
The main advantage of trading using opposite Hiscox and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hiscox position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| Hiscox vs. mobilezone holding AG | ||
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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