Correlation Between Step One and Insurance Australia
Can any of the company-specific risk be diversified away by investing in both Step One and Insurance Australia 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 Step One and Insurance Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Step One Clothing and Insurance Australia Group, you can compare the effects of market volatilities on Step One and Insurance Australia 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 Step One with a short position of Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Step One and Insurance Australia.
Diversification Opportunities for Step One and Insurance Australia
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Step and Insurance is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Step One Clothing and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia and Step One 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 Step One Clothing are associated (or correlated) with Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of Step One i.e., Step One and Insurance Australia go up and down completely randomly.
Pair Corralation between Step One and Insurance Australia
Assuming the 90 days trading horizon Step One Clothing is expected to under-perform the Insurance Australia. In addition to that, Step One is 2.05 times more volatile than Insurance Australia Group. It trades about -0.15 of its total potential returns per unit of risk. Insurance Australia Group is currently generating about 0.23 per unit of volatility. If you would invest 754.00 in Insurance Australia Group on August 29, 2024 and sell it today you would earn a total of 52.00 from holding Insurance Australia Group or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Step One Clothing vs. Insurance Australia Group
Performance |
| Timeline |
| Step One Clothing |
| Insurance Australia |
Step One and Insurance Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Step One and Insurance Australia
The main advantage of trading using opposite Step One and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Step One position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.| Step One vs. Genetic Technologies | Step One vs. Fisher Paykel Healthcare | Step One vs. BTC Health Limited | Step One vs. Advanced Braking Technology |
| Insurance Australia vs. Australian United Investment | Insurance Australia vs. Platinum Asia Investments | Insurance Australia vs. Embark Education Group | Insurance Australia vs. Step One Clothing |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |