Correlation Between Insurance Australia and Dug Technology
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and Dug Technology 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 Dug Technology 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 Dug Technology, you can compare the effects of market volatilities on Insurance Australia and Dug Technology 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 Dug Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and Dug Technology.
Diversification Opportunities for Insurance Australia and Dug Technology
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Insurance and Dug is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and Dug Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dug Technology 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 Dug Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dug Technology has no effect on the direction of Insurance Australia i.e., Insurance Australia and Dug Technology go up and down completely randomly.
Pair Corralation between Insurance Australia and Dug Technology
Assuming the 90 days trading horizon Insurance Australia Group is expected to generate 0.47 times more return on investment than Dug Technology. However, Insurance Australia Group is 2.15 times less risky than Dug Technology. It trades about 0.01 of its potential returns per unit of risk. Dug Technology is currently generating about -0.1 per unit of risk. If you would invest 844.00 in Insurance Australia Group on October 17, 2024 and sell it today you would earn a total of 1.00 from holding Insurance Australia Group or generate 0.12% 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. Dug Technology
Performance |
| Timeline |
| Insurance Australia |
| Dug Technology |
Insurance Australia and Dug Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and Dug Technology
The main advantage of trading using opposite Insurance Australia and Dug Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, Dug Technology 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 Dug Technology will offset losses from the drop in Dug Technology's long position.| Insurance Australia vs. Queste Communications | Insurance Australia vs. Liberty Financial Group | Insurance Australia vs. Credit Clear | Insurance Australia vs. Auswide Bank |
| Dug Technology vs. Aeon Metals | Dug Technology vs. Falcon Metals | Dug Technology vs. Commonwealth Bank of | Dug Technology vs. Insurance Australia Group |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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