Correlation Between INSURANCE AUST and ALLEGROEU
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and ALLEGROEU 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 ALLEGROEU 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 ALLEGROEU ZY 01, you can compare the effects of market volatilities on INSURANCE AUST and ALLEGROEU 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 ALLEGROEU. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and ALLEGROEU.
Diversification Opportunities for INSURANCE AUST and ALLEGROEU
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INSURANCE and ALLEGROEU is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and ALLEGROEU ZY 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLEGROEU ZY 01 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 ALLEGROEU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLEGROEU ZY 01 has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and ALLEGROEU go up and down completely randomly.
Pair Corralation between INSURANCE AUST and ALLEGROEU
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 0.69 times more return on investment than ALLEGROEU. However, INSURANCE AUST GRP is 1.44 times less risky than ALLEGROEU. It trades about 0.13 of its potential returns per unit of risk. ALLEGROEU ZY 01 is currently generating about -0.02 per unit of risk. If you would invest 318.00 in INSURANCE AUST GRP on September 14, 2024 and sell it today you would earn a total of 187.00 from holding INSURANCE AUST GRP or generate 58.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. ALLEGROEU ZY 01
Performance |
| Timeline |
| INSURANCE AUST GRP |
| ALLEGROEU ZY 01 |
INSURANCE AUST and ALLEGROEU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and ALLEGROEU
The main advantage of trading using opposite INSURANCE AUST and ALLEGROEU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, ALLEGROEU 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 ALLEGROEU will offset losses from the drop in ALLEGROEU's long position.| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc |
| ALLEGROEU vs. INSURANCE AUST GRP | ALLEGROEU vs. Zijin Mining Group | ALLEGROEU vs. Harmony Gold Mining | ALLEGROEU vs. SBI Insurance 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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