Correlation Between Packaging and REVO INSURANCE
Can any of the company-specific risk be diversified away by investing in both Packaging and REVO 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 Packaging and REVO INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Packaging of and REVO INSURANCE SPA, you can compare the effects of market volatilities on Packaging and REVO 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 Packaging with a short position of REVO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packaging and REVO INSURANCE.
Diversification Opportunities for Packaging and REVO INSURANCE
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Packaging and REVO is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Packaging of and REVO INSURANCE SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REVO INSURANCE SPA and Packaging 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 Packaging of are associated (or correlated) with REVO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REVO INSURANCE SPA has no effect on the direction of Packaging i.e., Packaging and REVO INSURANCE go up and down completely randomly.
Pair Corralation between Packaging and REVO INSURANCE
Assuming the 90 days horizon Packaging is expected to generate 11.06 times less return on investment than REVO INSURANCE. But when comparing it to its historical volatility, Packaging of is 1.27 times less risky than REVO INSURANCE. It trades about 0.03 of its potential returns per unit of risk. REVO INSURANCE SPA is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,030 in REVO INSURANCE SPA on September 13, 2024 and sell it today you would earn a total of 65.00 from holding REVO INSURANCE SPA or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Packaging of vs. REVO INSURANCE SPA
Performance |
| Timeline |
| Packaging |
| REVO INSURANCE SPA |
Packaging and REVO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Packaging and REVO INSURANCE
The main advantage of trading using opposite Packaging and REVO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Packaging position performs unexpectedly, REVO 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 REVO INSURANCE will offset losses from the drop in REVO INSURANCE's long position.| Packaging vs. Graphic Packaging Holding | Packaging vs. Superior Plus Corp | Packaging vs. SIVERS SEMICONDUCTORS AB | Packaging vs. Norsk Hydro ASA |
| REVO INSURANCE vs. Lyxor 1 | REVO INSURANCE vs. Xtrackers LevDAX | REVO INSURANCE vs. Xtrackers ShortDAX | REVO INSURANCE vs. Superior Plus Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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