Correlation Between INSURANCE AUST and UNIPHAR PLC
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and UNIPHAR PLC 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 INSURANCE AUST and UNIPHAR PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSURANCE AUST GRP and UNIPHAR PLC EO, you can compare the effects of market volatilities on INSURANCE AUST and UNIPHAR PLC 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 INSURANCE AUST with a short position of UNIPHAR PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and UNIPHAR PLC.
Diversification Opportunities for INSURANCE AUST and UNIPHAR PLC
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INSURANCE and UNIPHAR is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and UNIPHAR PLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIPHAR PLC EO and INSURANCE AUST 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 INSURANCE AUST GRP are associated (or correlated) with UNIPHAR PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIPHAR PLC EO has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and UNIPHAR PLC go up and down completely randomly.
Pair Corralation between INSURANCE AUST and UNIPHAR PLC
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 0.65 times more return on investment than UNIPHAR PLC. However, INSURANCE AUST GRP is 1.55 times less risky than UNIPHAR PLC. It trades about 0.13 of its potential returns per unit of risk. UNIPHAR PLC EO is currently generating about 0.0 per unit of risk. If you would invest 327.00 in INSURANCE AUST GRP on August 26, 2024 and sell it today you would earn a total of 178.00 from holding INSURANCE AUST GRP or generate 54.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. UNIPHAR PLC EO
Performance |
| Timeline |
| INSURANCE AUST GRP |
| UNIPHAR PLC EO |
INSURANCE AUST and UNIPHAR PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and UNIPHAR PLC
The main advantage of trading using opposite INSURANCE AUST and UNIPHAR PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, UNIPHAR PLC 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 UNIPHAR PLC will offset losses from the drop in UNIPHAR PLC's long position.| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Microsoft |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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