Correlation Between Insurance Australia and Peel Mining
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and Peel 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 Peel 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 Peel Mining, you can compare the effects of market volatilities on Insurance Australia and Peel 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 Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and Peel Mining.
Diversification Opportunities for Insurance Australia and Peel Mining
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insurance and Peel is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and Peel Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel 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 Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining has no effect on the direction of Insurance Australia i.e., Insurance Australia and Peel Mining go up and down completely randomly.
Pair Corralation between Insurance Australia and Peel Mining
Assuming the 90 days trading horizon Insurance Australia Group is expected to generate 0.83 times more return on investment than Peel Mining. However, Insurance Australia Group is 1.2 times less risky than Peel Mining. It trades about 0.09 of its potential returns per unit of risk. Peel Mining is currently generating about -0.23 per unit of risk. If you would invest 836.00 in Insurance Australia Group on October 12, 2024 and sell it today you would earn a total of 21.00 from holding Insurance Australia Group or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Insurance Australia Group vs. Peel Mining
Performance |
| Timeline |
| Insurance Australia |
| Peel Mining |
Insurance Australia and Peel Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and Peel Mining
The main advantage of trading using opposite Insurance Australia and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, Peel 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 Peel Mining will offset losses from the drop in Peel Mining's long position.| Insurance Australia vs. Prime Financial Group | Insurance Australia vs. Kkr Credit Income | Insurance Australia vs. Dexus Convenience Retail | Insurance Australia vs. Medibank Private |
| Peel Mining vs. Macquarie Technology Group | Peel Mining vs. Insurance Australia Group | Peel Mining vs. Nufarm Finance NZ | Peel Mining vs. Platinum Asset Management |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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