Correlation Between Insurance Australia and VITA 34
Can any of the company-specific risk be diversified away by investing in both Insurance Australia and VITA 34 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 VITA 34 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 VITA 34 AG, you can compare the effects of market volatilities on Insurance Australia and VITA 34 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 VITA 34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insurance Australia and VITA 34.
Diversification Opportunities for Insurance Australia and VITA 34
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Insurance and VITA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Insurance Australia Group and VITA 34 AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VITA 34 AG 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 VITA 34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VITA 34 AG has no effect on the direction of Insurance Australia i.e., Insurance Australia and VITA 34 go up and down completely randomly.
Pair Corralation between Insurance Australia and VITA 34
Assuming the 90 days horizon Insurance Australia Group is expected to generate 0.58 times more return on investment than VITA 34. However, Insurance Australia Group is 1.73 times less risky than VITA 34. It trades about 0.09 of its potential returns per unit of risk. VITA 34 AG is currently generating about -0.04 per unit of risk. If you would invest 261.00 in Insurance Australia Group on September 13, 2024 and sell it today you would earn a total of 244.00 from holding Insurance Australia Group or generate 93.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.51% |
| Values | Daily Returns |
Insurance Australia Group vs. VITA 34 AG
Performance |
| Timeline |
| Insurance Australia |
| VITA 34 AG |
Insurance Australia and VITA 34 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insurance Australia and VITA 34
The main advantage of trading using opposite Insurance Australia and VITA 34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insurance Australia position performs unexpectedly, VITA 34 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 VITA 34 will offset losses from the drop in VITA 34's long position.| Insurance Australia vs. QBE Insurance Group | Insurance Australia vs. Superior Plus Corp | Insurance Australia vs. SIVERS SEMICONDUCTORS AB | Insurance Australia vs. CHINA HUARONG ENERHD 50 |
| VITA 34 vs. Solstad Offshore ASA | VITA 34 vs. YOOMA WELLNESS INC | VITA 34 vs. Eidesvik Offshore ASA | VITA 34 vs. Natural Health Trends |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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