Correlation Between Safety Insurance and TIANDE CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Safety Insurance and TIANDE CHEMICAL 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 TIANDE CHEMICAL 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 TIANDE CHEMICAL, you can compare the effects of market volatilities on Safety Insurance and TIANDE CHEMICAL 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 TIANDE CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and TIANDE CHEMICAL.
Diversification Opportunities for Safety Insurance and TIANDE CHEMICAL
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Safety and TIANDE is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group and TIANDE CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIANDE CHEMICAL 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 TIANDE CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIANDE CHEMICAL has no effect on the direction of Safety Insurance i.e., Safety Insurance and TIANDE CHEMICAL go up and down completely randomly.
Pair Corralation between Safety Insurance and TIANDE CHEMICAL
Assuming the 90 days horizon Safety Insurance is expected to generate 7.79 times less return on investment than TIANDE CHEMICAL. But when comparing it to its historical volatility, Safety Insurance Group is 2.21 times less risky than TIANDE CHEMICAL. It trades about 0.02 of its potential returns per unit of risk. TIANDE CHEMICAL is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3.08 in TIANDE CHEMICAL on October 12, 2024 and sell it today you would earn a total of 4.17 from holding TIANDE CHEMICAL or generate 135.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safety Insurance Group vs. TIANDE CHEMICAL
Performance |
| Timeline |
| Safety Insurance |
| TIANDE CHEMICAL |
Safety Insurance and TIANDE CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and TIANDE CHEMICAL
The main advantage of trading using opposite Safety Insurance and TIANDE CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance position performs unexpectedly, TIANDE CHEMICAL 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 TIANDE CHEMICAL will offset losses from the drop in TIANDE CHEMICAL's long position.| Safety Insurance vs. PICC Property and | Safety Insurance vs. QBE Insurance Group | Safety Insurance vs. Superior Plus Corp | Safety Insurance vs. NMI Holdings |
| TIANDE CHEMICAL vs. Pembina Pipeline Corp | TIANDE CHEMICAL vs. BORR DRILLING NEW | TIANDE CHEMICAL vs. Safety Insurance Group | TIANDE CHEMICAL vs. Zurich Insurance Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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