Correlation Between Insurance Australia and OPERA SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and OPERA SOFTWARE 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 OPERA SOFTWARE 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 OPERA SOFTWARE, you can compare the effects of market volatilities on Insurance Australia and OPERA SOFTWARE 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 OPERA SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and OPERA SOFTWARE.
Diversification Opportunities for Insurance Australia and OPERA SOFTWARE
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insurance and OPERA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and OPERA SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPERA SOFTWARE 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 OPERA SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPERA SOFTWARE has no effect on the direction of Insurance Australia i.e., Insurance Australia and OPERA SOFTWARE go up and down completely randomly.
Pair Corralation between Insurance Australia and OPERA SOFTWARE
Assuming the 90 days horizon Insurance Australia Group is expected to generate 0.78 times more return on investment than OPERA SOFTWARE. However, Insurance Australia Group is 1.28 times less risky than OPERA SOFTWARE. It trades about 0.22 of its potential returns per unit of risk. OPERA SOFTWARE is currently generating about 0.12 per unit of risk. If you would invest 500.00 in Insurance Australia Group on October 26, 2024 and sell it today you would earn a total of 25.00 from holding Insurance Australia Group or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insurance Australia Group vs. OPERA SOFTWARE
Performance |
| Timeline |
| Insurance Australia |
| OPERA SOFTWARE |
Insurance Australia and OPERA SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and OPERA SOFTWARE
The main advantage of trading using opposite Insurance Australia and OPERA SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, OPERA SOFTWARE 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 OPERA SOFTWARE will offset losses from the drop in OPERA SOFTWARE's long position.| Insurance Australia vs. PICC Property and | Insurance Australia vs. Fairfax Financial Holdings | Insurance Australia vs. QBE Insurance Group |
| OPERA SOFTWARE vs. MHP Hotel AG | OPERA SOFTWARE vs. DALATA HOTEL | OPERA SOFTWARE vs. Perseus Mining Limited | OPERA SOFTWARE vs. ADRIATIC METALS LS 013355 |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |