Correlation Between INSURANCE AUST and Astellas Pharma
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST and Astellas Pharma 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 Astellas Pharma 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 Astellas Pharma, you can compare the effects of market volatilities on INSURANCE AUST and Astellas Pharma 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 Astellas Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and Astellas Pharma.
Diversification Opportunities for INSURANCE AUST and Astellas Pharma
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INSURANCE and Astellas is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP and Astellas Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astellas Pharma 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 Astellas Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astellas Pharma has no effect on the direction of INSURANCE AUST i.e., INSURANCE AUST and Astellas Pharma go up and down completely randomly.
Pair Corralation between INSURANCE AUST and Astellas Pharma
Assuming the 90 days trading horizon INSURANCE AUST GRP is expected to generate 0.78 times more return on investment than Astellas Pharma. However, INSURANCE AUST GRP is 1.28 times less risky than Astellas Pharma. It trades about 0.36 of its potential returns per unit of risk. Astellas Pharma is currently generating about -0.16 per unit of risk. If you would invest 448.00 in INSURANCE AUST GRP on August 26, 2024 and sell it today you would earn a total of 57.00 from holding INSURANCE AUST GRP or generate 12.72% 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. Astellas Pharma
Performance |
| Timeline |
| INSURANCE AUST GRP |
| Astellas Pharma |
INSURANCE AUST and Astellas Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and Astellas Pharma
The main advantage of trading using opposite INSURANCE AUST and Astellas Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST position performs unexpectedly, Astellas Pharma 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 Astellas Pharma will offset losses from the drop in Astellas Pharma's long position.| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc |
| Astellas Pharma vs. INSURANCE AUST GRP | Astellas Pharma vs. INTER CARS SA | Astellas Pharma vs. Cars Inc | Astellas Pharma vs. CARSALESCOM |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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