Correlation Between Safety Insurance and AutoZone
Can any of the company-specific risk be diversified away by investing in both Safety Insurance and AutoZone 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 AutoZone 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 AutoZone, you can compare the effects of market volatilities on Safety Insurance and AutoZone 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 AutoZone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and AutoZone.
Diversification Opportunities for Safety Insurance and AutoZone
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Safety and AutoZone is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group and AutoZone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoZone 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 AutoZone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoZone has no effect on the direction of Safety Insurance i.e., Safety Insurance and AutoZone go up and down completely randomly.
Pair Corralation between Safety Insurance and AutoZone
Assuming the 90 days horizon Safety Insurance Group is expected to under-perform the AutoZone. In addition to that, Safety Insurance is 1.3 times more volatile than AutoZone. It trades about -0.17 of its total potential returns per unit of risk. AutoZone is currently generating about -0.13 per unit of volatility. If you would invest 319,400 in AutoZone on October 17, 2024 and sell it today you would lose (7,000) from holding AutoZone or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Safety Insurance Group vs. AutoZone
Performance |
| Timeline |
| Safety Insurance |
| AutoZone |
Safety Insurance and AutoZone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and AutoZone
The main advantage of trading using opposite Safety Insurance and AutoZone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance position performs unexpectedly, AutoZone 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 AutoZone will offset losses from the drop in AutoZone's long position.| Safety Insurance vs. VULCAN MATERIALS | Safety Insurance vs. Plastic Omnium | Safety Insurance vs. CANON MARKETING JP | Safety Insurance vs. Siamgas And Petrochemicals |
| AutoZone vs. The Yokohama Rubber | AutoZone vs. CITY OFFICE REIT | AutoZone vs. Summit Materials | AutoZone vs. NEWELL RUBBERMAID |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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