Correlation Between 48128GU24 and Direct Line
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By analyzing existing cross correlation between US48128GU248 and Direct Line Insurance, you can compare the effects of market volatilities on 48128GU24 and Direct Line 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 48128GU24 with a short position of Direct Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of 48128GU24 and Direct Line.
Diversification Opportunities for 48128GU24 and Direct Line
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 48128GU24 and Direct is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding US48128GU248 and Direct Line Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Line Insurance and 48128GU24 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 US48128GU248 are associated (or correlated) with Direct Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Line Insurance has no effect on the direction of 48128GU24 i.e., 48128GU24 and Direct Line go up and down completely randomly.
Pair Corralation between 48128GU24 and Direct Line
Assuming the 90 days trading horizon US48128GU248 is expected to under-perform the Direct Line. But the bond apears to be less risky and, when comparing its historical volatility, US48128GU248 is 1.61 times less risky than Direct Line. The bond trades about -0.26 of its potential returns per unit of risk. The Direct Line Insurance is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 864.00 in Direct Line Insurance on September 5, 2024 and sell it today you would earn a total of 283.00 from holding Direct Line Insurance or generate 32.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 27.27% |
| Values | Daily Returns |
US48128GU248 vs. Direct Line Insurance
Performance |
| Timeline |
| US48128GU248 |
| Direct Line Insurance |
48128GU24 and Direct Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 48128GU24 and Direct Line
The main advantage of trading using opposite 48128GU24 and Direct Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 48128GU24 position performs unexpectedly, Direct Line 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 Direct Line will offset losses from the drop in Direct Line's long position.| 48128GU24 vs. Direct Line Insurance | 48128GU24 vs. Commonwealth Bank of | 48128GU24 vs. Aspen Insurance Holdings | 48128GU24 vs. United Fire Group |
| Direct Line vs. Hooker Furniture | Direct Line vs. Mesa Air Group | Direct Line vs. United Guardian | Direct Line vs. JD Sports Fashion |
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.
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