Correlation Between International General and BB Seguridade
Can any of the company-specific risk be diversified away by investing in both International General and BB Seguridade 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 BB Seguridade 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 BB Seguridade Participacoes, you can compare the effects of market volatilities on International General and BB Seguridade 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 BB Seguridade. Check out your portfolio center. Please also check ongoing floating volatility patterns of International General and BB Seguridade.
Diversification Opportunities for International General and BB Seguridade
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and BBSEY is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding International General Insuranc and BB Seguridade Participacoes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Seguridade Partic 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 BB Seguridade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Seguridade Partic has no effect on the direction of International General i.e., International General and BB Seguridade go up and down completely randomly.
Pair Corralation between International General and BB Seguridade
Given the investment horizon of 90 days International General is expected to generate 1.87 times less return on investment than BB Seguridade. But when comparing it to its historical volatility, International General Insurance is 1.04 times less risky than BB Seguridade. It trades about 0.18 of its potential returns per unit of risk. BB Seguridade Participacoes is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 586.00 in BB Seguridade Participacoes on November 1, 2024 and sell it today you would earn a total of 78.00 from holding BB Seguridade Participacoes or generate 13.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
International General Insuranc vs. BB Seguridade Participacoes
Performance |
| Timeline |
| International General |
| BB Seguridade Partic |
International General and BB Seguridade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International General and BB Seguridade
The main advantage of trading using opposite International General and BB Seguridade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International General position performs unexpectedly, BB Seguridade 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 BB Seguridade will offset losses from the drop in BB Seguridade's long position.| International General vs. Enstar Group Limited | International General vs. Axa Equitable Holdings | International General vs. Arch Capital Group | International General vs. Waterdrop ADR |
| BB Seguridade vs. Assicurazioni Generali SpA | BB Seguridade vs. Athene Holding | BB Seguridade vs. ageas SANV | BB Seguridade vs. Athene Holding |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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