Correlation Between Stewart Information and INFORMATION SVC
Can any of the company-specific risk be diversified away by investing in both Stewart Information and INFORMATION SVC 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 INFORMATION SVC 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 INFORMATION SVC GRP, you can compare the effects of market volatilities on Stewart Information and INFORMATION SVC 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 INFORMATION SVC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stewart Information and INFORMATION SVC.
Diversification Opportunities for Stewart Information and INFORMATION SVC
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stewart and INFORMATION is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Information Services and INFORMATION SVC GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFORMATION SVC GRP 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 INFORMATION SVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFORMATION SVC GRP has no effect on the direction of Stewart Information i.e., Stewart Information and INFORMATION SVC go up and down completely randomly.
Pair Corralation between Stewart Information and INFORMATION SVC
Assuming the 90 days horizon Stewart Information is expected to generate 1.47 times less return on investment than INFORMATION SVC. In addition to that, Stewart Information is 1.14 times more volatile than INFORMATION SVC GRP. It trades about 0.13 of its total potential returns per unit of risk. INFORMATION SVC GRP is currently generating about 0.22 per unit of volatility. If you would invest 280.00 in INFORMATION SVC GRP on August 24, 2024 and sell it today you would earn a total of 28.00 from holding INFORMATION SVC GRP or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stewart Information Services vs. INFORMATION SVC GRP
Performance |
| Timeline |
| Stewart Information |
| INFORMATION SVC GRP |
Stewart Information and INFORMATION SVC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stewart Information and INFORMATION SVC
The main advantage of trading using opposite Stewart Information and INFORMATION SVC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stewart Information position performs unexpectedly, INFORMATION SVC 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 INFORMATION SVC will offset losses from the drop in INFORMATION SVC's long position.| Stewart Information vs. QBE Insurance Group | Stewart Information vs. Insurance Australia Group | Stewart Information vs. Superior Plus Corp | Stewart Information vs. NMI Holdings |
| INFORMATION SVC vs. Apple Inc | INFORMATION SVC vs. Apple Inc | INFORMATION SVC vs. Apple Inc | INFORMATION SVC vs. Apple Inc |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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