Correlation Between Stewart Information and DATAGROUP
Can any of the company-specific risk be diversified away by investing in both Stewart Information and DATAGROUP 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 Stewart Information and DATAGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stewart Information Services and DATAGROUP SE, you can compare the effects of market volatilities on Stewart Information and DATAGROUP 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 Stewart Information with a short position of DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stewart Information and DATAGROUP.
Diversification Opportunities for Stewart Information and DATAGROUP
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stewart and DATAGROUP is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Information Services and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE and Stewart Information 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 Stewart Information Services are associated (or correlated) with DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of Stewart Information i.e., Stewart Information and DATAGROUP go up and down completely randomly.
Pair Corralation between Stewart Information and DATAGROUP
Assuming the 90 days horizon Stewart Information Services is expected to generate 1.32 times more return on investment than DATAGROUP. However, Stewart Information is 1.32 times more volatile than DATAGROUP SE. It trades about -0.1 of its potential returns per unit of risk. DATAGROUP SE is currently generating about -0.16 per unit of risk. If you would invest 6,400 in Stewart Information Services on November 3, 2024 and sell it today you would lose (350.00) from holding Stewart Information Services or give up 5.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Stewart Information Services vs. DATAGROUP SE
Performance |
| Timeline |
| Stewart Information |
| DATAGROUP SE |
Stewart Information and DATAGROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stewart Information and DATAGROUP
The main advantage of trading using opposite Stewart Information and DATAGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stewart Information position performs unexpectedly, DATAGROUP 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 DATAGROUP will offset losses from the drop in DATAGROUP's long position.| Stewart Information vs. URBAN OUTFITTERS | Stewart Information vs. Eidesvik Offshore ASA | Stewart Information vs. Transport International Holdings | Stewart Information vs. Broadcom |
| DATAGROUP vs. Automatic Data Processing | DATAGROUP vs. Synovus Financial Corp | DATAGROUP vs. Pure Storage | DATAGROUP vs. BANK OF CHINA |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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