Correlation Between Safety Insurance and Theralase Technologies
Can any of the company-specific risk be diversified away by investing in both Safety Insurance and Theralase Technologies 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 Theralase Technologies 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 Theralase Technologies, you can compare the effects of market volatilities on Safety Insurance and Theralase Technologies 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 Theralase Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and Theralase Technologies.
Diversification Opportunities for Safety Insurance and Theralase Technologies
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Safety and Theralase is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group and Theralase Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theralase Technologies 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 Theralase Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theralase Technologies has no effect on the direction of Safety Insurance i.e., Safety Insurance and Theralase Technologies go up and down completely randomly.
Pair Corralation between Safety Insurance and Theralase Technologies
Assuming the 90 days horizon Safety Insurance is expected to generate 14.96 times less return on investment than Theralase Technologies. But when comparing it to its historical volatility, Safety Insurance Group is 5.97 times less risky than Theralase Technologies. It trades about 0.05 of its potential returns per unit of risk. Theralase Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9.85 in Theralase Technologies on August 31, 2024 and sell it today you would earn a total of 5.15 from holding Theralase Technologies or generate 52.28% 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. Theralase Technologies
Performance |
| Timeline |
| Safety Insurance |
| Theralase Technologies |
Safety Insurance and Theralase Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and Theralase Technologies
The main advantage of trading using opposite Safety Insurance and Theralase Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance position performs unexpectedly, Theralase Technologies 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 Theralase Technologies will offset losses from the drop in Theralase Technologies' long position.| Safety Insurance vs. Chuangs China Investments | Safety Insurance vs. UNIVERSAL MUSIC GROUP | Safety Insurance vs. Gladstone Investment | Safety Insurance vs. BURLINGTON STORES |
| Theralase Technologies vs. FANDIFI TECHNOLOGY P | Theralase Technologies vs. SCANDMEDICAL SOLDK 040 | Theralase Technologies vs. Vishay Intertechnology | Theralase Technologies vs. Micron Technology |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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