Correlation Between AETNA and Insteel Industries
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By analyzing existing cross correlation between AETNA INC NEW and Insteel Industries, you can compare the effects of market volatilities on AETNA and Insteel Industries 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 AETNA with a short position of Insteel Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of AETNA and Insteel Industries.
Diversification Opportunities for AETNA and Insteel Industries
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AETNA and Insteel is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding AETNA INC NEW and Insteel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insteel Industries and AETNA 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 AETNA INC NEW are associated (or correlated) with Insteel Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insteel Industries has no effect on the direction of AETNA i.e., AETNA and Insteel Industries go up and down completely randomly.
Pair Corralation between AETNA and Insteel Industries
Assuming the 90 days trading horizon AETNA INC NEW is expected to under-perform the Insteel Industries. But the bond apears to be less risky and, when comparing its historical volatility, AETNA INC NEW is 8.69 times less risky than Insteel Industries. The bond trades about -0.17 of its potential returns per unit of risk. The Insteel Industries is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,845 in Insteel Industries on August 24, 2024 and sell it today you would earn a total of 166.00 from holding Insteel Industries or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 65.22% |
| Values | Daily Returns |
AETNA INC NEW vs. Insteel Industries
Performance |
| Timeline |
| AETNA INC NEW |
| Insteel Industries |
AETNA and Insteel Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AETNA and Insteel Industries
The main advantage of trading using opposite AETNA and Insteel Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AETNA position performs unexpectedly, Insteel Industries 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 Insteel Industries will offset losses from the drop in Insteel Industries' long position.| AETNA vs. Toro Co | AETNA vs. RBC Bearings Incorporated | AETNA vs. Franklin Wireless Corp | AETNA vs. Insteel Industries |
| Insteel Industries vs. Haynes International | Insteel Industries vs. Mayville Engineering Co | Insteel Industries vs. Gulf Island Fabrication | Insteel Industries vs. ESAB Corp |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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