Correlation Between INSURANCE AUST and Calibre Mining
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and Calibre Mining 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 Calibre Mining 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 Calibre Mining Corp, you can compare the effects of market volatilities on INSURANCE AUST and Calibre Mining 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 Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and Calibre Mining.
Diversification Opportunities for INSURANCE AUST and Calibre Mining
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INSURANCE and Calibre is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp 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 Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and Calibre Mining go up and down completely randomly.
Pair Corralation between INSURANCE AUST and Calibre Mining
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 0.7 times more return on investment than Calibre Mining. However, INSURANCE AUST GRP is 1.43 times less risky than Calibre Mining. It trades about 0.2 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.15 per unit of risk. If you would invest 456.00 in INSURANCE AUST GRP on August 24, 2024 and sell it today you would earn a total of 36.00 from holding INSURANCE AUST GRP or generate 7.89% 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. Calibre Mining Corp
Performance |
| Timeline |
| INSURANCE AUST GRP |
| Calibre Mining Corp |
INSURANCE AUST and Calibre Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and Calibre Mining
The main advantage of trading using opposite INSURANCE AUST and Calibre Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, Calibre Mining 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 Calibre Mining will offset losses from the drop in Calibre Mining's long position.| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc |
| Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple Inc | Calibre Mining vs. Apple 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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