Correlation Between Insignia Financial and Collins Foods
Can any of the company-specific risk be diversified away by investing in both Insignia Financial and Collins Foods 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 Collins Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insignia Financial and Collins Foods, you can compare the effects of market volatilities on Insignia Financial and Collins Foods 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 Collins Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and Collins Foods.
Diversification Opportunities for Insignia Financial and Collins Foods
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Insignia and Collins is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and Collins Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods 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 Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods has no effect on the direction of Insignia Financial i.e., Insignia Financial and Collins Foods go up and down completely randomly.
Pair Corralation between Insignia Financial and Collins Foods
Assuming the 90 days trading horizon Insignia Financial is expected to generate 3.85 times more return on investment than Collins Foods. However, Insignia Financial is 3.85 times more volatile than Collins Foods. It trades about 0.33 of its potential returns per unit of risk. Collins Foods is currently generating about -0.37 per unit of risk. If you would invest 306.00 in Insignia Financial on October 12, 2024 and sell it today you would earn a total of 98.00 from holding Insignia Financial or generate 32.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insignia Financial vs. Collins Foods
Performance |
| Timeline |
| Insignia Financial |
| Collins Foods |
Insignia Financial and Collins Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insignia Financial and Collins Foods
The main advantage of trading using opposite Insignia Financial and Collins Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia Financial position performs unexpectedly, Collins Foods 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 Collins Foods will offset losses from the drop in Collins Foods' long position.| Insignia Financial vs. Queste Communications | Insignia Financial vs. Home Consortium | Insignia Financial vs. Sandon Capital Investments | Insignia Financial vs. Premier Investments |
| Collins Foods vs. Retail Food Group | Collins Foods vs. Bailador Technology Invest | Collins Foods vs. Hansen Technologies | Collins Foods vs. Genetic Technologies |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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