Correlation Between Carsales and Assicurazioni Generali
Can any of the company-specific risk be diversified away by investing in both Carsales and Assicurazioni Generali 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 Carsales and Assicurazioni Generali into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carsales and Assicurazioni Generali SpA, you can compare the effects of market volatilities on Carsales and Assicurazioni Generali 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 Carsales with a short position of Assicurazioni Generali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carsales and Assicurazioni Generali.
Diversification Opportunities for Carsales and Assicurazioni Generali
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carsales and Assicurazioni is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Carsales and Assicurazioni Generali SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assicurazioni Generali and Carsales 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 Carsales are associated (or correlated) with Assicurazioni Generali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assicurazioni Generali has no effect on the direction of Carsales i.e., Carsales and Assicurazioni Generali go up and down completely randomly.
Pair Corralation between Carsales and Assicurazioni Generali
Assuming the 90 days trading horizon Carsales is expected to generate 1.31 times more return on investment than Assicurazioni Generali. However, Carsales is 1.31 times more volatile than Assicurazioni Generali SpA. It trades about 0.09 of its potential returns per unit of risk. Assicurazioni Generali SpA is currently generating about 0.1 per unit of risk. If you would invest 1,282 in Carsales on September 3, 2024 and sell it today you would earn a total of 1,258 from holding Carsales or generate 98.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carsales vs. Assicurazioni Generali SpA
Performance |
| Timeline |
| Carsales |
| Assicurazioni Generali |
Carsales and Assicurazioni Generali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carsales and Assicurazioni Generali
The main advantage of trading using opposite Carsales and Assicurazioni Generali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carsales position performs unexpectedly, Assicurazioni Generali 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 Assicurazioni Generali will offset losses from the drop in Assicurazioni Generali's long position.| Carsales vs. Thai Beverage Public | Carsales vs. Premier Foods PLC | Carsales vs. Food Life Companies | Carsales vs. CN MODERN DAIRY |
| Assicurazioni Generali vs. Berkshire Hathaway | Assicurazioni Generali vs. Berkshire Hathaway | Assicurazioni Generali vs. Superior Plus Corp | Assicurazioni Generali vs. NMI Holdings |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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