Correlation Between Insurance Australia and Brixmor Property
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and Brixmor Property 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 Brixmor Property 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 Brixmor Property Group, you can compare the effects of market volatilities on Insurance Australia and Brixmor Property 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 Brixmor Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and Brixmor Property.
Diversification Opportunities for Insurance Australia and Brixmor Property
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Insurance and Brixmor is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and Brixmor Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brixmor Property 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 Brixmor Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brixmor Property has no effect on the direction of Insurance Australia i.e., Insurance Australia and Brixmor Property go up and down completely randomly.
Pair Corralation between Insurance Australia and Brixmor Property
Assuming the 90 days horizon Insurance Australia Group is expected to generate 1.38 times more return on investment than Brixmor Property. However, Insurance Australia is 1.38 times more volatile than Brixmor Property Group. It trades about 0.1 of its potential returns per unit of risk. Brixmor Property Group is currently generating about 0.12 per unit of risk. If you would invest 320.00 in Insurance Australia Group on September 14, 2024 and sell it today you would earn a total of 178.00 from holding Insurance Australia Group or generate 55.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. Brixmor Property Group
Performance |
| Timeline |
| Insurance Australia |
| Brixmor Property |
Insurance Australia and Brixmor Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and Brixmor Property
The main advantage of trading using opposite Insurance Australia and Brixmor Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, Brixmor Property 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 Brixmor Property will offset losses from the drop in Brixmor Property's long position.| Insurance Australia vs. Superior Plus Corp | Insurance Australia vs. SIVERS SEMICONDUCTORS AB | Insurance Australia vs. CHINA HUARONG ENERHD 50 | Insurance Australia vs. NORDIC HALIBUT AS |
| Brixmor Property vs. Penta Ocean Construction Co | Brixmor Property vs. Daito Trust Construction | Brixmor Property vs. Perseus Mining Limited | Brixmor Property vs. Sumitomo Mitsui Construction |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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