Correlation Between Insteel Industries and FedNat Holding
Can any of the company-specific risk be diversified away by investing in both Insteel Industries and FedNat Holding 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 Insteel Industries and FedNat Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insteel Industries and FedNat Holding, you can compare the effects of market volatilities on Insteel Industries and FedNat Holding 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 Insteel Industries with a short position of FedNat Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insteel Industries and FedNat Holding.
Diversification Opportunities for Insteel Industries and FedNat Holding
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Insteel and FedNat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Insteel Industries and FedNat Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FedNat Holding and Insteel Industries 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 Insteel Industries are associated (or correlated) with FedNat Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FedNat Holding has no effect on the direction of Insteel Industries i.e., Insteel Industries and FedNat Holding go up and down completely randomly.
Pair Corralation between Insteel Industries and FedNat Holding
If you would invest 2,692 in Insteel Industries on September 3, 2024 and sell it today you would earn a total of 256.00 from holding Insteel Industries or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Insteel Industries vs. FedNat Holding
Performance |
| Timeline |
| Insteel Industries |
| FedNat Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Insteel Industries and FedNat Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insteel Industries and FedNat Holding
The main advantage of trading using opposite Insteel Industries and FedNat Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insteel Industries position performs unexpectedly, FedNat Holding 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 FedNat Holding will offset losses from the drop in FedNat Holding's long position.| Insteel Industries vs. Mayville Engineering Co | Insteel Industries vs. Gulf Island Fabrication | Insteel Industries vs. ESAB Corp | Insteel Industries vs. Northwest Pipe |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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