Correlation Between International General and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both International General and Advantage Solutions 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 International General and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International General Insurance and Advantage Solutions, you can compare the effects of market volatilities on International General and Advantage Solutions 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 International General with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of International General and Advantage Solutions.
Diversification Opportunities for International General and Advantage Solutions
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and Advantage is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding International General Insuranc and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and International General 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 International General Insurance are associated (or correlated) with Advantage Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Solutions has no effect on the direction of International General i.e., International General and Advantage Solutions go up and down completely randomly.
Pair Corralation between International General and Advantage Solutions
Given the investment horizon of 90 days International General Insurance is expected to generate 0.63 times more return on investment than Advantage Solutions. However, International General Insurance is 1.58 times less risky than Advantage Solutions. It trades about 0.27 of its potential returns per unit of risk. Advantage Solutions is currently generating about 0.16 per unit of risk. If you would invest 2,224 in International General Insurance on August 28, 2024 and sell it today you would earn a total of 364.00 from holding International General Insurance or generate 16.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
International General Insuranc vs. Advantage Solutions
Performance |
| Timeline |
| International General |
| Advantage Solutions |
International General and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International General and Advantage Solutions
The main advantage of trading using opposite International General and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International General position performs unexpectedly, Advantage Solutions 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 Advantage Solutions will offset losses from the drop in Advantage Solutions' long position.| International General vs. Enstar Group Limited | International General vs. Aegon NV ADR | International General vs. American International Group | International General vs. Axa Equitable Holdings |
| Advantage Solutions vs. Criteo Sa | Advantage Solutions vs. Deluxe | Advantage Solutions vs. Emerald Expositions Events | Advantage Solutions vs. Marchex |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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