Correlation Between Intuitive Investments and Direct Line
Can any of the company-specific risk be diversified away by investing in both Intuitive Investments and Direct Line 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 Intuitive Investments and Direct Line into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intuitive Investments Group and Direct Line Insurance, you can compare the effects of market volatilities on Intuitive Investments and Direct Line 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 Intuitive Investments with a short position of Direct Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intuitive Investments and Direct Line.
Diversification Opportunities for Intuitive Investments and Direct Line
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intuitive and Direct is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group and Direct Line Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Line Insurance and Intuitive Investments 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 Intuitive Investments Group are associated (or correlated) with Direct Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Line Insurance has no effect on the direction of Intuitive Investments i.e., Intuitive Investments and Direct Line go up and down completely randomly.
Pair Corralation between Intuitive Investments and Direct Line
Assuming the 90 days trading horizon Intuitive Investments Group is expected to under-perform the Direct Line. But the stock apears to be less risky and, when comparing its historical volatility, Intuitive Investments Group is 23.13 times less risky than Direct Line. The stock trades about -0.05 of its potential returns per unit of risk. The Direct Line Insurance is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 15,260 in Direct Line Insurance on September 13, 2024 and sell it today you would earn a total of 9,440 from holding Direct Line Insurance or generate 61.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intuitive Investments Group vs. Direct Line Insurance
Performance |
| Timeline |
| Intuitive Investments |
| Direct Line Insurance |
Intuitive Investments and Direct Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intuitive Investments and Direct Line
The main advantage of trading using opposite Intuitive Investments and Direct Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intuitive Investments position performs unexpectedly, Direct Line 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 Direct Line will offset losses from the drop in Direct Line's long position.| Intuitive Investments vs. Catalyst Media Group | Intuitive Investments vs. CATLIN GROUP | Intuitive Investments vs. Tamburi Investment Partners | Intuitive Investments vs. Magnora ASA |
| Direct Line vs. GreenX Metals | Direct Line vs. CleanTech Lithium plc | Direct Line vs. Endeavour Mining Corp | Direct Line vs. Innovative Industrial Properties |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Commodity Directory Find actively traded commodities issued by global exchanges |