Correlation Between Safety Insurance and ASSOC BR
Can any of the company-specific risk be diversified away by investing in both Safety Insurance and ASSOC BR 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 ASSOC BR 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 ASSOC BR FOODS, you can compare the effects of market volatilities on Safety Insurance and ASSOC BR 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 ASSOC BR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and ASSOC BR.
Diversification Opportunities for Safety Insurance and ASSOC BR
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Safety and ASSOC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group and ASSOC BR FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSOC BR FOODS 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 ASSOC BR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSOC BR FOODS has no effect on the direction of Safety Insurance i.e., Safety Insurance and ASSOC BR go up and down completely randomly.
Pair Corralation between Safety Insurance and ASSOC BR
Assuming the 90 days horizon Safety Insurance Group is expected to under-perform the ASSOC BR. But the stock apears to be less risky and, when comparing its historical volatility, Safety Insurance Group is 1.08 times less risky than ASSOC BR. The stock trades about -0.11 of its potential returns per unit of risk. The ASSOC BR FOODS is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,300 in ASSOC BR FOODS on December 24, 2024 and sell it today you would lose (20.00) from holding ASSOC BR FOODS or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. ASSOC BR FOODS
Performance |
| Timeline |
| Safety Insurance |
| ASSOC BR FOODS |
Safety Insurance and ASSOC BR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and ASSOC BR
The main advantage of trading using opposite Safety Insurance and ASSOC BR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance position performs unexpectedly, ASSOC BR 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 ASSOC BR will offset losses from the drop in ASSOC BR's long position.| Safety Insurance vs. USU Software AG | Safety Insurance vs. Charter Communications | Safety Insurance vs. Magic Software Enterprises | Safety Insurance vs. MAGIC SOFTWARE ENTR |
| ASSOC BR vs. Ubisoft Entertainment SA | ASSOC BR vs. Atresmedia Corporacin de | ASSOC BR vs. G III Apparel Group | ASSOC BR vs. American Eagle Outfitters |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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