Correlation Between INTERNATIONAL ENERGY and CORONATION INSURANCE
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By analyzing existing cross correlation between INTERNATIONAL ENERGY INSURANCE and CORONATION INSURANCE PLC, you can compare the effects of market volatilities on INTERNATIONAL ENERGY and CORONATION INSURANCE 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 ENERGY with a short position of CORONATION INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERNATIONAL ENERGY and CORONATION INSURANCE.
Diversification Opportunities for INTERNATIONAL ENERGY and CORONATION INSURANCE
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INTERNATIONAL and CORONATION is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding INTERNATIONAL ENERGY INSURANCE and CORONATION INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORONATION INSURANCE PLC and INTERNATIONAL ENERGY 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 ENERGY INSURANCE are associated (or correlated) with CORONATION INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORONATION INSURANCE PLC has no effect on the direction of INTERNATIONAL ENERGY i.e., INTERNATIONAL ENERGY and CORONATION INSURANCE go up and down completely randomly.
Pair Corralation between INTERNATIONAL ENERGY and CORONATION INSURANCE
Assuming the 90 days trading horizon INTERNATIONAL ENERGY is expected to generate 3.51 times less return on investment than CORONATION INSURANCE. But when comparing it to its historical volatility, INTERNATIONAL ENERGY INSURANCE is 1.05 times less risky than CORONATION INSURANCE. It trades about 0.02 of its potential returns per unit of risk. CORONATION INSURANCE PLC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 71.00 in CORONATION INSURANCE PLC on September 2, 2024 and sell it today you would earn a total of 32.00 from holding CORONATION INSURANCE PLC or generate 45.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERNATIONAL ENERGY INSURANCE vs. CORONATION INSURANCE PLC
Performance |
| Timeline |
| INTERNATIONAL ENERGY |
| CORONATION INSURANCE PLC |
INTERNATIONAL ENERGY and CORONATION INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERNATIONAL ENERGY and CORONATION INSURANCE
The main advantage of trading using opposite INTERNATIONAL ENERGY and CORONATION INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERNATIONAL ENERGY position performs unexpectedly, CORONATION INSURANCE 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 CORONATION INSURANCE will offset losses from the drop in CORONATION INSURANCE's long position.The idea behind INTERNATIONAL ENERGY INSURANCE and CORONATION INSURANCE PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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