Correlation Between Insignia Financial and Rand Mining
Can any of the company-specific risk be diversified away by investing in both Insignia Financial and Rand 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 Insignia Financial and Rand Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insignia Financial and Rand Mining, you can compare the effects of market volatilities on Insignia Financial and Rand 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 Insignia Financial with a short position of Rand Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and Rand Mining.
Diversification Opportunities for Insignia Financial and Rand Mining
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Insignia and Rand is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and Rand Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rand Mining 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 Rand Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rand Mining has no effect on the direction of Insignia Financial i.e., Insignia Financial and Rand Mining go up and down completely randomly.
Pair Corralation between Insignia Financial and Rand Mining
Assuming the 90 days trading horizon Insignia Financial is expected to generate 1.28 times more return on investment than Rand Mining. However, Insignia Financial is 1.28 times more volatile than Rand Mining. It trades about 0.32 of its potential returns per unit of risk. Rand Mining is currently generating about 0.13 per unit of risk. If you would invest 354.00 in Insignia Financial on November 4, 2024 and sell it today you would earn a total of 89.00 from holding Insignia Financial or generate 25.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insignia Financial vs. Rand Mining
Performance |
| Timeline |
| Insignia Financial |
| Rand Mining |
Insignia Financial and Rand Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insignia Financial and Rand Mining
The main advantage of trading using opposite Insignia Financial and Rand Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia Financial position performs unexpectedly, Rand 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 Rand Mining will offset losses from the drop in Rand Mining's long position.| Insignia Financial vs. Falcon Metals | Insignia Financial vs. Credit Clear | Insignia Financial vs. Liberty Financial Group | Insignia Financial vs. Auswide Bank |
| Rand Mining vs. Land Homes Group | Rand Mining vs. Gold Road Resources | Rand Mining vs. Saferoads Holdings | Rand Mining vs. Dalaroo Metals |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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