Correlation Between INSURANCE AUST and FONIX MOBILE
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and FONIX MOBILE 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 FONIX MOBILE 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 FONIX MOBILE PLC, you can compare the effects of market volatilities on INSURANCE AUST and FONIX MOBILE 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 FONIX MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and FONIX MOBILE.
Diversification Opportunities for INSURANCE AUST and FONIX MOBILE
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INSURANCE and FONIX is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and FONIX MOBILE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FONIX MOBILE PLC 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 FONIX MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FONIX MOBILE PLC has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and FONIX MOBILE go up and down completely randomly.
Pair Corralation between INSURANCE AUST and FONIX MOBILE
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 0.75 times more return on investment than FONIX MOBILE. However, INSURANCE AUST GRP is 1.33 times less risky than FONIX MOBILE. It trades about 0.08 of its potential returns per unit of risk. FONIX MOBILE PLC is currently generating about 0.02 per unit of risk. If you would invest 282.00 in INSURANCE AUST GRP on October 11, 2024 and sell it today you would earn a total of 223.00 from holding INSURANCE AUST GRP or generate 79.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. FONIX MOBILE PLC
Performance |
| Timeline |
| INSURANCE AUST GRP |
| FONIX MOBILE PLC |
INSURANCE AUST and FONIX MOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and FONIX MOBILE
The main advantage of trading using opposite INSURANCE AUST and FONIX MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, FONIX MOBILE 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 FONIX MOBILE will offset losses from the drop in FONIX MOBILE's long position.| INSURANCE AUST vs. ALLFUNDS GROUP EO 0025 | INSURANCE AUST vs. Major Drilling Group | INSURANCE AUST vs. Apollo Investment Corp | INSURANCE AUST vs. QINGCI GAMES INC |
| FONIX MOBILE vs. Reinsurance Group of | FONIX MOBILE vs. The Hanover Insurance | FONIX MOBILE vs. INSURANCE AUST GRP | FONIX MOBILE vs. ULTRA CLEAN HLDGS |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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