Correlation Between Safety Insurance and ALEFARM BREWING
Can any of the company-specific risk be diversified away by investing in both Safety Insurance and ALEFARM BREWING 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 ALEFARM BREWING 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 ALEFARM BREWING DK 05, you can compare the effects of market volatilities on Safety Insurance and ALEFARM BREWING 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 ALEFARM BREWING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and ALEFARM BREWING.
Diversification Opportunities for Safety Insurance and ALEFARM BREWING
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Safety and ALEFARM is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group and ALEFARM BREWING DK 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALEFARM BREWING DK 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 ALEFARM BREWING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALEFARM BREWING DK has no effect on the direction of Safety Insurance i.e., Safety Insurance and ALEFARM BREWING go up and down completely randomly.
Pair Corralation between Safety Insurance and ALEFARM BREWING
Assuming the 90 days horizon Safety Insurance Group is expected to under-perform the ALEFARM BREWING. But the stock apears to be less risky and, when comparing its historical volatility, Safety Insurance Group is 3.08 times less risky than ALEFARM BREWING. The stock trades about -0.18 of its potential returns per unit of risk. The ALEFARM BREWING DK 05 is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 17.00 in ALEFARM BREWING DK 05 on October 16, 2024 and sell it today you would earn a total of 0.00 from holding ALEFARM BREWING DK 05 or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. ALEFARM BREWING DK 05
Performance |
| Timeline |
| Safety Insurance |
| ALEFARM BREWING DK |
Safety Insurance and ALEFARM BREWING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and ALEFARM BREWING
The main advantage of trading using opposite Safety Insurance and ALEFARM BREWING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance position performs unexpectedly, ALEFARM BREWING 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 ALEFARM BREWING will offset losses from the drop in ALEFARM BREWING's long position.| Safety Insurance vs. Linedata Services SA | Safety Insurance vs. DeVry Education Group | Safety Insurance vs. Adtalem Global Education | Safety Insurance vs. Strategic Education |
| ALEFARM BREWING vs. Air Lease | ALEFARM BREWING vs. Singapore Reinsurance | ALEFARM BREWING vs. Safety Insurance Group | ALEFARM BREWING vs. Sixt Leasing SE |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |