Correlation Between INSURANCE AUST and Firan Technology
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and Firan Technology 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 Firan Technology 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 Firan Technology Group, you can compare the effects of market volatilities on INSURANCE AUST and Firan Technology 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 Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and Firan Technology.
Diversification Opportunities for INSURANCE AUST and Firan Technology
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INSURANCE and Firan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology 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 Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and Firan Technology go up and down completely randomly.
Pair Corralation between INSURANCE AUST and Firan Technology
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 1.35 times more return on investment than Firan Technology. However, INSURANCE AUST is 1.35 times more volatile than Firan Technology Group. It trades about 0.01 of its potential returns per unit of risk. Firan Technology Group is currently generating about -0.05 per unit of risk. If you would invest 500.00 in INSURANCE AUST GRP on October 16, 2024 and sell it today you would earn a total of 0.00 from holding INSURANCE AUST GRP or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. Firan Technology Group
Performance |
| Timeline |
| INSURANCE AUST GRP |
| Firan Technology |
INSURANCE AUST and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and Firan Technology
The main advantage of trading using opposite INSURANCE AUST and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology's long position.| INSURANCE AUST vs. NXP Semiconductors NV | INSURANCE AUST vs. MOBILE FACTORY INC | INSURANCE AUST vs. T MOBILE INCDL 00001 | INSURANCE AUST vs. BE Semiconductor Industries |
| Firan Technology vs. MAGNUM MINING EXP | Firan Technology vs. GRIFFIN MINING LTD | Firan Technology vs. BioNTech SE | Firan Technology vs. ASPEN TECHINC DL |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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