Correlation Between Safety Insurance and Shunfeng International
Can any of the company-specific risk be diversified away by investing in both Safety Insurance and Shunfeng International 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 Safety Insurance and Shunfeng International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Insurance Group and Shunfeng International Clean, you can compare the effects of market volatilities on Safety Insurance and Shunfeng International 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 Safety Insurance with a short position of Shunfeng International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and Shunfeng International.
Diversification Opportunities for Safety Insurance and Shunfeng International
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Safety and Shunfeng is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group and Shunfeng International Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shunfeng International and Safety Insurance 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 Safety Insurance Group are associated (or correlated) with Shunfeng International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shunfeng International has no effect on the direction of Safety Insurance i.e., Safety Insurance and Shunfeng International go up and down completely randomly.
Pair Corralation between Safety Insurance and Shunfeng International
Assuming the 90 days horizon Safety Insurance Group is expected to generate 0.14 times more return on investment than Shunfeng International. However, Safety Insurance Group is 7.01 times less risky than Shunfeng International. It trades about -0.01 of its potential returns per unit of risk. Shunfeng International Clean is currently generating about -0.09 per unit of risk. If you would invest 7,910 in Safety Insurance Group on September 15, 2024 and sell it today you would lose (60.00) from holding Safety Insurance Group or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. Shunfeng International Clean
Performance |
| Timeline |
| Safety Insurance |
| Shunfeng International |
Safety Insurance and Shunfeng International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and Shunfeng International
The main advantage of trading using opposite Safety Insurance and Shunfeng International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance position performs unexpectedly, Shunfeng International 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 Shunfeng International will offset losses from the drop in Shunfeng International's long position.| Safety Insurance vs. Insurance Australia Group | Safety Insurance vs. Superior Plus Corp | Safety Insurance vs. SIVERS SEMICONDUCTORS AB | Safety Insurance vs. CHINA HUARONG ENERHD 50 |
| Shunfeng International vs. Sunrun Inc | Shunfeng International vs. SMA Solar Technology | Shunfeng International vs. Superior Plus Corp | Shunfeng International vs. SIVERS SEMICONDUCTORS AB |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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