Correlation Between Insignia Financial and Australian Unity
Can any of the company-specific risk be diversified away by investing in both Insignia Financial and Australian Unity 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 Insignia Financial and Australian Unity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insignia Financial and Australian Unity Ltd, you can compare the effects of market volatilities on Insignia Financial and Australian Unity 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 Insignia Financial with a short position of Australian Unity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and Australian Unity.
Diversification Opportunities for Insignia Financial and Australian Unity
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Insignia and Australian is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and Australian Unity Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Unity and Insignia Financial 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 Insignia Financial are associated (or correlated) with Australian Unity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Unity has no effect on the direction of Insignia Financial i.e., Insignia Financial and Australian Unity go up and down completely randomly.
Pair Corralation between Insignia Financial and Australian Unity
Assuming the 90 days trading horizon Insignia Financial is expected to under-perform the Australian Unity. In addition to that, Insignia Financial is 3.1 times more volatile than Australian Unity Ltd. It trades about -0.17 of its total potential returns per unit of risk. Australian Unity Ltd is currently generating about -0.02 per unit of volatility. If you would invest 8,297 in Australian Unity Ltd on September 12, 2024 and sell it today you would lose (32.00) from holding Australian Unity Ltd or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insignia Financial vs. Australian Unity Ltd
Performance |
| Timeline |
| Insignia Financial |
| Australian Unity |
Insignia Financial and Australian Unity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insignia Financial and Australian Unity
The main advantage of trading using opposite Insignia Financial and Australian Unity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia Financial position performs unexpectedly, Australian Unity 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 Australian Unity will offset losses from the drop in Australian Unity's long position.| Insignia Financial vs. Environmental Clean Technologies | Insignia Financial vs. National Australia Bank | Insignia Financial vs. Carnegie Clean Energy | Insignia Financial vs. Cleanaway Waste Management |
| Australian Unity vs. Medibank Private | Australian Unity vs. Insignia Financial | Australian Unity vs. Cleanaway Waste Management | Australian Unity vs. Qbe Insurance 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |