Correlation Between Insurance Australia and Meta Financial
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and Meta Financial 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 Meta Financial 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 Meta Financial Group, you can compare the effects of market volatilities on Insurance Australia and Meta Financial 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 Meta Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and Meta Financial.
Diversification Opportunities for Insurance Australia and Meta Financial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insurance and Meta is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and Meta Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Financial Group 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 Meta Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Financial Group has no effect on the direction of Insurance Australia i.e., Insurance Australia and Meta Financial go up and down completely randomly.
Pair Corralation between Insurance Australia and Meta Financial
Assuming the 90 days horizon Insurance Australia is expected to generate 1.2 times less return on investment than Meta Financial. But when comparing it to its historical volatility, Insurance Australia Group is 1.09 times less risky than Meta Financial. It trades about 0.25 of its potential returns per unit of risk. Meta Financial Group is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 7,150 in Meta Financial Group on November 5, 2024 and sell it today you would earn a total of 600.00 from holding Meta Financial Group or generate 8.39% 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. Meta Financial Group
Performance |
| Timeline |
| Insurance Australia |
| Meta Financial Group |
Insurance Australia and Meta Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and Meta Financial
The main advantage of trading using opposite Insurance Australia and Meta Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, Meta Financial 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 Meta Financial will offset losses from the drop in Meta Financial's long position.| Insurance Australia vs. Fortescue Metals Group | Insurance Australia vs. SBM OFFSHORE | Insurance Australia vs. Jacquet Metal Service | Insurance Australia vs. Transport International Holdings |
| Meta Financial vs. Addus HomeCare | Meta Financial vs. ADDUS HOMECARE | Meta Financial vs. Corporate Office Properties | Meta Financial vs. Autohome ADR |
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.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |