Correlation Between Insurance Australia and Sayona Mining
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and Sayona 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 Sayona 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 Sayona Mining, you can compare the effects of market volatilities on Insurance Australia and Sayona 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 Sayona Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and Sayona Mining.
Diversification Opportunities for Insurance Australia and Sayona Mining
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Insurance and Sayona is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and Sayona Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sayona 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 Sayona Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sayona Mining has no effect on the direction of Insurance Australia i.e., Insurance Australia and Sayona Mining go up and down completely randomly.
Pair Corralation between Insurance Australia and Sayona Mining
Assuming the 90 days trading horizon Insurance Australia Group is expected to generate 0.36 times more return on investment than Sayona Mining. However, Insurance Australia Group is 2.81 times less risky than Sayona Mining. It trades about 0.09 of its potential returns per unit of risk. Sayona Mining is currently generating about -0.25 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. Sayona Mining
Performance |
| Timeline |
| Insurance Australia |
| Sayona Mining |
Insurance Australia and Sayona Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and Sayona Mining
The main advantage of trading using opposite Insurance Australia and Sayona Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, Sayona 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 Sayona Mining will offset losses from the drop in Sayona Mining's long position.| Insurance Australia vs. Bluescope Steel | Insurance Australia vs. Champion Iron | Insurance Australia vs. Tombador Iron | Insurance Australia vs. National Storage REIT |
| Sayona Mining vs. Hutchison Telecommunications | Sayona Mining vs. Ainsworth Game Technology | Sayona Mining vs. ACDC Metals | Sayona Mining 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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