Correlation Between Corporate Office and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both Corporate Office and INSURANCE AUST 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 Corporate Office and INSURANCE AUST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Office Properties and INSURANCE AUST GRP, you can compare the effects of market volatilities on Corporate Office and INSURANCE AUST 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 Corporate Office with a short position of INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and INSURANCE AUST.
Diversification Opportunities for Corporate Office and INSURANCE AUST
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Corporate and INSURANCE is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP and Corporate Office 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 Corporate Office Properties are associated (or correlated) with INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of Corporate Office i.e., Corporate Office and INSURANCE AUST go up and down completely randomly.
Pair Corralation between Corporate Office and INSURANCE AUST
Assuming the 90 days horizon Corporate Office Properties is expected to under-perform the INSURANCE AUST. But the stock apears to be less risky and, when comparing its historical volatility, Corporate Office Properties is 1.12 times less risky than INSURANCE AUST. The stock trades about -0.05 of its potential returns per unit of risk. The INSURANCE AUST GRP is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 450.00 in INSURANCE AUST GRP on October 26, 2024 and sell it today you would earn a total of 75.00 from holding INSURANCE AUST GRP or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Office Properties vs. INSURANCE AUST GRP
Performance |
| Timeline |
| Corporate Office Pro |
| INSURANCE AUST GRP |
Corporate Office and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and INSURANCE AUST
The main advantage of trading using opposite Corporate Office and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, INSURANCE AUST 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 AUST will offset losses from the drop in INSURANCE AUST's long position.| Corporate Office vs. Digital Realty Trust | Corporate Office vs. Gecina SA | Corporate Office vs. Japan Real Estate | Corporate Office vs. SL Green Realty |
| INSURANCE AUST vs. CHAMPION IRON | INSURANCE AUST vs. Corporate Office Properties | INSURANCE AUST vs. Clean Energy Fuels | INSURANCE AUST vs. Khiron Life Sciences |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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