Correlation Between INSURANCE AUST and Techtronic Industries
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and Techtronic Industries 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 Techtronic Industries 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 Techtronic Industries, you can compare the effects of market volatilities on INSURANCE AUST and Techtronic Industries 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 Techtronic Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and Techtronic Industries.
Diversification Opportunities for INSURANCE AUST and Techtronic Industries
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between INSURANCE and Techtronic is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and Techtronic Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techtronic Industries 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 Techtronic Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techtronic Industries has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and Techtronic Industries go up and down completely randomly.
Pair Corralation between INSURANCE AUST and Techtronic Industries
Assuming the 90 days trading horizon INSURANCE AUST is expected to generate 1.27 times less return on investment than Techtronic Industries. But when comparing it to its historical volatility, INSURANCE AUST GRP is 1.33 times less risky than Techtronic Industries. It trades about 0.07 of its potential returns per unit of risk. Techtronic Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,245 in Techtronic Industries on September 17, 2024 and sell it today you would earn a total of 31.00 from holding Techtronic Industries or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. Techtronic Industries
Performance |
| Timeline |
| INSURANCE AUST GRP |
| Techtronic Industries |
INSURANCE AUST and Techtronic Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and Techtronic Industries
The main advantage of trading using opposite INSURANCE AUST and Techtronic Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, Techtronic Industries 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 Techtronic Industries will offset losses from the drop in Techtronic Industries' long position.| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc |
| Techtronic Industries vs. INSURANCE AUST GRP | Techtronic Industries vs. LION ONE METALS | Techtronic Industries vs. Ping An Insurance | Techtronic Industries vs. MCEWEN MINING INC |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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