Correlation Between Insurance Australia and Chalice Mining
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and Chalice Mining 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 Insurance Australia and Chalice Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insurance Australia Group and Chalice Mining Limited, you can compare the effects of market volatilities on Insurance Australia and Chalice Mining 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 Insurance Australia with a short position of Chalice Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and Chalice Mining.
Diversification Opportunities for Insurance Australia and Chalice Mining
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Insurance and Chalice is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and Chalice Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chalice Mining and Insurance Australia 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 Insurance Australia Group are associated (or correlated) with Chalice Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chalice Mining has no effect on the direction of Insurance Australia i.e., Insurance Australia and Chalice Mining go up and down completely randomly.
Pair Corralation between Insurance Australia and Chalice Mining
Assuming the 90 days trading horizon Insurance Australia Group is expected to generate 0.35 times more return on investment than Chalice Mining. However, Insurance Australia Group is 2.85 times less risky than Chalice Mining. It trades about 0.3 of its potential returns per unit of risk. Chalice Mining Limited is currently generating about 0.04 per unit of risk. If you would invest 856.00 in Insurance Australia Group on November 6, 2024 and sell it today you would earn a total of 64.00 from holding Insurance Australia Group or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. Chalice Mining Limited
Performance |
| Timeline |
| Insurance Australia |
| Chalice Mining |
Insurance Australia and Chalice Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and Chalice Mining
The main advantage of trading using opposite Insurance Australia and Chalice Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, Chalice Mining 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 Chalice Mining will offset losses from the drop in Chalice Mining's long position.| Insurance Australia vs. Centaurus Metals | Insurance Australia vs. Autosports Group | Insurance Australia vs. Computershare | Insurance Australia vs. Group 6 Metals |
| Chalice Mining vs. Dalaroo Metals | Chalice Mining vs. Aristocrat Leisure | Chalice Mining vs. Computershare | Chalice Mining vs. Viva Leisure |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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