Correlation Between Ras Technology and Insurance Australia
Can any of the company-specific risk be diversified away by investing in both Ras Technology and Insurance Australia 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 Ras Technology and Insurance Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ras Technology Holdings and Insurance Australia Group, you can compare the effects of market volatilities on Ras Technology and Insurance Australia 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 Ras Technology with a short position of Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ras Technology and Insurance Australia.
Diversification Opportunities for Ras Technology and Insurance Australia
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ras and Insurance is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Ras Technology Holdings and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia and Ras Technology 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 Ras Technology Holdings are associated (or correlated) with Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of Ras Technology i.e., Ras Technology and Insurance Australia go up and down completely randomly.
Pair Corralation between Ras Technology and Insurance Australia
Assuming the 90 days trading horizon Ras Technology Holdings is expected to under-perform the Insurance Australia. In addition to that, Ras Technology is 2.66 times more volatile than Insurance Australia Group. It trades about -0.39 of its total potential returns per unit of risk. Insurance Australia Group is currently generating about 0.4 per unit of volatility. If you would invest 750.00 in Insurance Australia Group on September 1, 2024 and sell it today you would earn a total of 103.00 from holding Insurance Australia Group or generate 13.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ras Technology Holdings vs. Insurance Australia Group
Performance |
| Timeline |
| Ras Technology Holdings |
| Insurance Australia |
Ras Technology and Insurance Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ras Technology and Insurance Australia
The main advantage of trading using opposite Ras Technology and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ras Technology position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.| Ras Technology vs. Aneka Tambang Tbk | Ras Technology vs. Unibail Rodamco Westfield SE | Ras Technology vs. Macquarie Group | Ras Technology vs. Commonwealth Bank |
| Insurance Australia vs. Macquarie Bank Limited | Insurance Australia vs. Computershare | Insurance Australia vs. Ras Technology Holdings | Insurance Australia vs. Kkr Credit Income |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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