Correlation Between Media and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both Media and Safety Insurance 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 Media and Safety Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media and Games and Safety Insurance Group, you can compare the effects of market volatilities on Media and Safety 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 Media with a short position of Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and Safety Insurance.
Diversification Opportunities for Media and Safety Insurance
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Media and Safety is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance and Media 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 Media and Games are associated (or correlated) with Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of Media i.e., Media and Safety Insurance go up and down completely randomly.
Pair Corralation between Media and Safety Insurance
Assuming the 90 days trading horizon Media and Games is expected to generate 2.99 times more return on investment than Safety Insurance. However, Media is 2.99 times more volatile than Safety Insurance Group. It trades about -0.01 of its potential returns per unit of risk. Safety Insurance Group is currently generating about -0.3 per unit of risk. If you would invest 318.00 in Media and Games on October 28, 2024 and sell it today you would lose (7.00) from holding Media and Games or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media and Games vs. Safety Insurance Group
Performance |
| Timeline |
| Media and Games |
| Safety Insurance |
Media and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media and Safety Insurance
The main advantage of trading using opposite Media and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media position performs unexpectedly, Safety 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| Media vs. Hanison Construction Holdings | Media vs. Dairy Farm International | Media vs. Daito Trust Construction | Media vs. Television Broadcasts Limited |
| Safety Insurance vs. PICC Property and | Safety Insurance vs. Fairfax Financial Holdings | Safety Insurance vs. QBE Insurance Group | Safety Insurance vs. Insurance Australia Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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