Correlation Between Insurance Australia and HYATT HOTELS-A
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and HYATT HOTELS-A 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 Australia and HYATT HOTELS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insurance Australia Group and HYATT HOTELS A, you can compare the effects of market volatilities on Insurance Australia and HYATT HOTELS-A 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 Australia with a short position of HYATT HOTELS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and HYATT HOTELS-A.
Diversification Opportunities for Insurance Australia and HYATT HOTELS-A
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insurance and HYATT is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A and Insurance Australia 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 Australia Group are associated (or correlated) with HYATT HOTELS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of Insurance Australia i.e., Insurance Australia and HYATT HOTELS-A go up and down completely randomly.
Pair Corralation between Insurance Australia and HYATT HOTELS-A
Assuming the 90 days horizon Insurance Australia Group is expected to generate 0.88 times more return on investment than HYATT HOTELS-A. However, Insurance Australia Group is 1.13 times less risky than HYATT HOTELS-A. It trades about 0.09 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.05 per unit of risk. If you would invest 275.00 in Insurance Australia Group on November 7, 2024 and sell it today you would earn a total of 265.00 from holding Insurance Australia Group or generate 96.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. HYATT HOTELS A
Performance |
| Timeline |
| Insurance Australia |
| HYATT HOTELS A |
Insurance Australia and HYATT HOTELS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and HYATT HOTELS-A
The main advantage of trading using opposite Insurance Australia and HYATT HOTELS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, HYATT HOTELS-A 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 HYATT HOTELS-A will offset losses from the drop in HYATT HOTELS-A's long position.| Insurance Australia vs. CullenFrost Bankers | Insurance Australia vs. Discover Financial Services | Insurance Australia vs. Keck Seng Investments | Insurance Australia vs. JLF INVESTMENT |
| HYATT HOTELS-A vs. CarsalesCom | HYATT HOTELS-A vs. ZhongAn Online P | HYATT HOTELS-A vs. Cairo Communication SpA | HYATT HOTELS-A vs. Zoom Video Communications |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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