Correlation Between Insurance Australia and OOhMedia
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and OOhMedia 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 OOhMedia 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 oOhMedia, you can compare the effects of market volatilities on Insurance Australia and OOhMedia 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 OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and OOhMedia.
Diversification Opportunities for Insurance Australia and OOhMedia
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insurance and OOhMedia is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia 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 OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Insurance Australia i.e., Insurance Australia and OOhMedia go up and down completely randomly.
Pair Corralation between Insurance Australia and OOhMedia
Assuming the 90 days trading horizon Insurance Australia is expected to generate 28.22 times less return on investment than OOhMedia. But when comparing it to its historical volatility, Insurance Australia Group is 1.08 times less risky than OOhMedia. It trades about 0.01 of its potential returns per unit of risk. oOhMedia is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 114.00 in oOhMedia on October 17, 2024 and sell it today you would earn a total of 11.00 from holding oOhMedia or generate 9.65% 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. oOhMedia
Performance |
| Timeline |
| Insurance Australia |
| oOhMedia |
Insurance Australia and OOhMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and OOhMedia
The main advantage of trading using opposite Insurance Australia and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, OOhMedia 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 OOhMedia will offset losses from the drop in OOhMedia's long position.| Insurance Australia vs. Retail Food Group | Insurance Australia vs. Pinnacle Investment Management | Insurance Australia vs. Charter Hall Retail | Insurance Australia vs. Viva Leisure |
| OOhMedia vs. Hutchison Telecommunications | OOhMedia vs. Insurance Australia Group | OOhMedia vs. Advanced Braking Technology | OOhMedia vs. Farm Pride Foods |
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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