Correlation Between MINCO SILVER and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both MINCO SILVER 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 MINCO SILVER and INSURANCE AUST into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MINCO SILVER and INSURANCE AUST GRP, you can compare the effects of market volatilities on MINCO SILVER 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 MINCO SILVER with a short position of INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of MINCO SILVER and INSURANCE AUST.
Diversification Opportunities for MINCO SILVER and INSURANCE AUST
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MINCO and INSURANCE is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding MINCO SILVER 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 MINCO SILVER 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 MINCO SILVER 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 MINCO SILVER i.e., MINCO SILVER and INSURANCE AUST go up and down completely randomly.
Pair Corralation between MINCO SILVER and INSURANCE AUST
Assuming the 90 days trading horizon MINCO SILVER is expected to under-perform the INSURANCE AUST. In addition to that, MINCO SILVER is 1.83 times more volatile than INSURANCE AUST GRP. It trades about -0.1 of its total potential returns per unit of risk. INSURANCE AUST GRP is currently generating about 0.32 per unit of volatility. If you would invest 450.00 in INSURANCE AUST GRP on August 27, 2024 and sell it today you would earn a total of 50.00 from holding INSURANCE AUST GRP or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MINCO SILVER vs. INSURANCE AUST GRP
Performance |
| Timeline |
| MINCO SILVER |
| INSURANCE AUST GRP |
MINCO SILVER and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MINCO SILVER and INSURANCE AUST
The main advantage of trading using opposite MINCO SILVER and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MINCO SILVER 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.| MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Microsoft |
| INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Apple Inc | INSURANCE AUST vs. Microsoft |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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