Correlation Between Safety Insurance and Textron
Can any of the company-specific risk be diversified away by investing in both Safety Insurance and Textron 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 Textron 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 Textron, you can compare the effects of market volatilities on Safety Insurance and Textron 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 Textron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and Textron.
Diversification Opportunities for Safety Insurance and Textron
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Safety and Textron is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance Group and Textron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Textron 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 Textron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Textron has no effect on the direction of Safety Insurance i.e., Safety Insurance and Textron go up and down completely randomly.
Pair Corralation between Safety Insurance and Textron
If you would invest 0.00 in Textron on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Textron or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 5.88% |
| Values | Daily Returns |
Safety Insurance Group vs. Textron
Performance |
| Timeline |
| Safety Insurance |
| Textron |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Safety Insurance and Textron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and Textron
The main advantage of trading using opposite Safety Insurance and Textron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance position performs unexpectedly, Textron 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 Textron will offset losses from the drop in Textron's long position.| Safety Insurance vs. SIDETRADE EO 1 | Safety Insurance vs. SALESFORCE INC CDR | Safety Insurance vs. Addtech AB | Safety Insurance vs. CHINA TONTINE WINES |
| Textron vs. Australian Agricultural | Textron vs. China Communications Services | Textron vs. Dairy Farm International | Textron vs. Daito Trust Construction |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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