Correlation Between Insurance Australia and Firstwave Cloud
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and Firstwave Cloud 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 Firstwave Cloud 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 Firstwave Cloud Technology, you can compare the effects of market volatilities on Insurance Australia and Firstwave Cloud 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 Firstwave Cloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and Firstwave Cloud.
Diversification Opportunities for Insurance Australia and Firstwave Cloud
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Insurance and Firstwave is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and Firstwave Cloud Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firstwave Cloud Tech 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 Firstwave Cloud. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firstwave Cloud Tech has no effect on the direction of Insurance Australia i.e., Insurance Australia and Firstwave Cloud go up and down completely randomly.
Pair Corralation between Insurance Australia and Firstwave Cloud
Assuming the 90 days trading horizon Insurance Australia Group is expected to generate 0.2 times more return on investment than Firstwave Cloud. However, Insurance Australia Group is 5.01 times less risky than Firstwave Cloud. It trades about 0.1 of its potential returns per unit of risk. Firstwave Cloud Technology is currently generating about -0.1 per unit of risk. If you would invest 854.00 in Insurance Australia Group on October 24, 2024 and sell it today you would earn a total of 17.00 from holding Insurance Australia Group or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. Firstwave Cloud Technology
Performance |
| Timeline |
| Insurance Australia |
| Firstwave Cloud Tech |
Insurance Australia and Firstwave Cloud Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and Firstwave Cloud
The main advantage of trading using opposite Insurance Australia and Firstwave Cloud positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, Firstwave Cloud 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 Firstwave Cloud will offset losses from the drop in Firstwave Cloud's long position.| Insurance Australia vs. Black Rock Mining | Insurance Australia vs. Dexus Convenience Retail | Insurance Australia vs. Cleanaway Waste Management | Insurance Australia vs. Sayona Mining |
| Firstwave Cloud vs. Advanced Braking Technology | Firstwave Cloud vs. Auctus Alternative Investments | Firstwave Cloud vs. MFF Capital Investments | Firstwave Cloud vs. Dug Technology |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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