Correlation Between Insurance Australia and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and LIFENET INSURANCE 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 LIFENET INSURANCE 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 LIFENET INSURANCE CO, you can compare the effects of market volatilities on Insurance Australia and LIFENET INSURANCE 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 LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and LIFENET INSURANCE.
Diversification Opportunities for Insurance Australia and LIFENET INSURANCE
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Insurance and LIFENET is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE 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 LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of Insurance Australia i.e., Insurance Australia and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between Insurance Australia and LIFENET INSURANCE
Assuming the 90 days horizon Insurance Australia Group is expected to generate 1.22 times more return on investment than LIFENET INSURANCE. However, Insurance Australia is 1.22 times more volatile than LIFENET INSURANCE CO. It trades about 0.22 of its potential returns per unit of risk. LIFENET INSURANCE CO is currently generating about -0.01 per unit of risk. If you would invest 450.00 in Insurance Australia Group on August 29, 2024 and sell it today you would earn a total of 50.00 from holding Insurance Australia Group or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Insurance Australia Group vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| Insurance Australia |
| LIFENET INSURANCE |
Insurance Australia and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and LIFENET INSURANCE
The main advantage of trading using opposite Insurance Australia and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, LIFENET INSURANCE 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE's long position.| Insurance Australia vs. PICC Property and | Insurance Australia vs. QBE Insurance Group | Insurance Australia vs. Superior Plus Corp | Insurance Australia vs. SIVERS SEMICONDUCTORS AB |
| LIFENET INSURANCE vs. Xtrackers LevDAX | LIFENET INSURANCE vs. Xtrackers ShortDAX | LIFENET INSURANCE vs. Lyxor 1 |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |