Correlation Between Insignia Financial and FleetPartners
Can any of the company-specific risk be diversified away by investing in both Insignia Financial and FleetPartners 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 FleetPartners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insignia Financial and FleetPartners Group, you can compare the effects of market volatilities on Insignia Financial and FleetPartners 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 FleetPartners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and FleetPartners.
Diversification Opportunities for Insignia Financial and FleetPartners
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Insignia and FleetPartners is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and FleetPartners Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FleetPartners Group 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 FleetPartners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FleetPartners Group has no effect on the direction of Insignia Financial i.e., Insignia Financial and FleetPartners go up and down completely randomly.
Pair Corralation between Insignia Financial and FleetPartners
Assuming the 90 days trading horizon Insignia Financial is expected to under-perform the FleetPartners. But the stock apears to be less risky and, when comparing its historical volatility, Insignia Financial is 1.23 times less risky than FleetPartners. The stock trades about -0.11 of its potential returns per unit of risk. The FleetPartners Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 304.00 in FleetPartners Group on August 30, 2024 and sell it today you would earn a total of 11.00 from holding FleetPartners Group or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insignia Financial vs. FleetPartners Group
Performance |
| Timeline |
| Insignia Financial |
| FleetPartners Group |
Insignia Financial and FleetPartners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insignia Financial and FleetPartners
The main advantage of trading using opposite Insignia Financial and FleetPartners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia Financial position performs unexpectedly, FleetPartners 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 FleetPartners will offset losses from the drop in FleetPartners' long position.| Insignia Financial vs. Renascor Resources | Insignia Financial vs. Venus Metals | Insignia Financial vs. Havilah Resources | Insignia Financial vs. Asara Resources |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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