Correlation Between INSURANCE AUST and Grammer AG
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and Grammer AG 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 Grammer AG 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 Grammer AG, you can compare the effects of market volatilities on INSURANCE AUST and Grammer AG 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 Grammer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and Grammer AG.
Diversification Opportunities for INSURANCE AUST and Grammer AG
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INSURANCE and Grammer is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and Grammer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grammer AG 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 Grammer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grammer AG has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and Grammer AG go up and down completely randomly.
Pair Corralation between INSURANCE AUST and Grammer AG
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 0.57 times more return on investment than Grammer AG. However, INSURANCE AUST GRP is 1.77 times less risky than Grammer AG. It trades about 0.09 of its potential returns per unit of risk. Grammer AG is currently generating about -0.03 per unit of risk. If you would invest 268.00 in INSURANCE AUST GRP on September 3, 2024 and sell it today you would earn a total of 247.00 from holding INSURANCE AUST GRP or generate 92.16% 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. Grammer AG
Performance |
| Timeline |
| INSURANCE AUST GRP |
| Grammer AG |
INSURANCE AUST and Grammer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and Grammer AG
The main advantage of trading using opposite INSURANCE AUST and Grammer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, Grammer AG 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 Grammer AG will offset losses from the drop in Grammer AG's long position.| INSURANCE AUST vs. PennyMac Mortgage Investment | INSURANCE AUST vs. Auto Trader Group | INSURANCE AUST vs. Gladstone Investment | INSURANCE AUST vs. TRADEDOUBLER AB SK |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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