Correlation Between Insurance Australia and Sky Metals
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and Sky Metals 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 Sky Metals 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 Sky Metals, you can compare the effects of market volatilities on Insurance Australia and Sky Metals 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 Sky Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and Sky Metals.
Diversification Opportunities for Insurance Australia and Sky Metals
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insurance and Sky is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and Sky Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sky Metals 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 Sky Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sky Metals has no effect on the direction of Insurance Australia i.e., Insurance Australia and Sky Metals go up and down completely randomly.
Pair Corralation between Insurance Australia and Sky Metals
Assuming the 90 days trading horizon Insurance Australia Group is expected to generate 0.28 times more return on investment than Sky Metals. However, Insurance Australia Group is 3.51 times less risky than Sky Metals. It trades about 0.09 of its potential returns per unit of risk. Sky Metals is currently generating about 0.02 per unit of risk. If you would invest 422.00 in Insurance Australia Group on December 13, 2024 and sell it today you would earn a total of 338.00 from holding Insurance Australia Group or generate 80.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.98% |
| Values | Daily Returns |
Insurance Australia Group vs. Sky Metals
Performance |
| Timeline |
| Insurance Australia |
| Sky Metals |
Insurance Australia and Sky Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and Sky Metals
The main advantage of trading using opposite Insurance Australia and Sky Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, Sky Metals 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 Sky Metals will offset losses from the drop in Sky Metals' long position.| Insurance Australia vs. Austco Healthcare | ||
| Insurance Australia vs. BKI Investment | ||
| Insurance Australia vs. Global Health | ||
| Insurance Australia vs. Ramsay Health Care |
| Sky Metals vs. Janison Education Group | ||
| Sky Metals vs. Insurance Australia Group | ||
| Sky Metals vs. Centrex Metals | ||
| Sky Metals vs. MetalsGrove Mining |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |