Correlation Between Trisura Group and Lancashire Holdings
Can any of the company-specific risk be diversified away by investing in both Trisura Group and Lancashire Holdings 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 Trisura Group and Lancashire Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trisura Group and Lancashire Holdings Limited, you can compare the effects of market volatilities on Trisura Group and Lancashire Holdings 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 Trisura Group with a short position of Lancashire Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trisura Group and Lancashire Holdings.
Diversification Opportunities for Trisura Group and Lancashire Holdings
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trisura and Lancashire is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Trisura Group and Lancashire Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lancashire Holdings and Trisura Group 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 Trisura Group are associated (or correlated) with Lancashire Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lancashire Holdings has no effect on the direction of Trisura Group i.e., Trisura Group and Lancashire Holdings go up and down completely randomly.
Pair Corralation between Trisura Group and Lancashire Holdings
Assuming the 90 days trading horizon Trisura Group is expected to under-perform the Lancashire Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Trisura Group is 1.08 times less risky than Lancashire Holdings. The stock trades about -0.32 of its potential returns per unit of risk. The Lancashire Holdings Limited is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 780.00 in Lancashire Holdings Limited on October 20, 2024 and sell it today you would lose (20.00) from holding Lancashire Holdings Limited or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trisura Group vs. Lancashire Holdings Limited
Performance |
| Timeline |
| Trisura Group |
| Lancashire Holdings |
Trisura Group and Lancashire Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trisura Group and Lancashire Holdings
The main advantage of trading using opposite Trisura Group and Lancashire Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trisura Group position performs unexpectedly, Lancashire Holdings 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 Lancashire Holdings will offset losses from the drop in Lancashire Holdings' long position.| Trisura Group vs. Mapfre SA | Trisura Group vs. First American Financial | Trisura Group vs. Assured Guaranty | Trisura Group vs. nib holdings limited |
| Lancashire Holdings vs. Mapfre SA | Lancashire Holdings vs. First American Financial | Lancashire Holdings vs. Assured Guaranty | Lancashire Holdings vs. nib holdings limited |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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