Correlation Between INSURANCE AUST and TRADEGATE
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and TRADEGATE 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 TRADEGATE 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 TRADEGATE, you can compare the effects of market volatilities on INSURANCE AUST and TRADEGATE 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 TRADEGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and TRADEGATE.
Diversification Opportunities for INSURANCE AUST and TRADEGATE
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between INSURANCE and TRADEGATE is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and TRADEGATE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEGATE 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 TRADEGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEGATE has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and TRADEGATE go up and down completely randomly.
Pair Corralation between INSURANCE AUST and TRADEGATE
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 7.69 times more return on investment than TRADEGATE. However, INSURANCE AUST is 7.69 times more volatile than TRADEGATE. It trades about 0.16 of its potential returns per unit of risk. TRADEGATE is currently generating about 0.0 per unit of risk. If you would invest 444.00 in INSURANCE AUST GRP on August 30, 2024 and sell it today you would earn a total of 52.00 from holding INSURANCE AUST GRP or generate 11.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. TRADEGATE
Performance |
| Timeline |
| INSURANCE AUST GRP |
| TRADEGATE |
INSURANCE AUST and TRADEGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and TRADEGATE
The main advantage of trading using opposite INSURANCE AUST and TRADEGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, TRADEGATE 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 TRADEGATE will offset losses from the drop in TRADEGATE's long position.| INSURANCE AUST vs. ScanSource | INSURANCE AUST vs. Canadian Utilities Limited | INSURANCE AUST vs. Selective Insurance Group | INSURANCE AUST vs. HANOVER INSURANCE |
| TRADEGATE vs. Apple Inc | TRADEGATE vs. Apple Inc | TRADEGATE vs. Superior Plus Corp | TRADEGATE vs. SIVERS SEMICONDUCTORS AB |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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