Correlation Between Assicurazioni Generali and International General

Can any of the company-specific risk be diversified away by investing in both Assicurazioni Generali and International General 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 Assicurazioni Generali and International General into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Assicurazioni Generali SpA and International General Insurance, you can compare the effects of market volatilities on Assicurazioni Generali and International General 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 Assicurazioni Generali with a short position of International General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assicurazioni Generali and International General.

Diversification Opportunities for Assicurazioni Generali and International General

-0.03

Correlation Coefficient

Assicurazioni Generali  International General

Good diversification

The 3 months correlation between Assicurazioni and International is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Assicurazioni Generali SpA and International General Insuranc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International General and Assicurazioni Generali 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 Assicurazioni Generali SpA are associated (or correlated) with International General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International General has no effect on the direction of Assicurazioni Generali i.e., Assicurazioni Generali and International General go up and down completely randomly.

Pair Corralation between Assicurazioni Generali and International General

Assuming the 90 days horizon Assicurazioni Generali SpA is expected to generate 0.73 times more return on investment than International General. However, Assicurazioni Generali SpA is 1.36 times less risky than International General. It trades about 0.0 of its potential returns per unit of risk. International General Insurance is currently generating about -0.22 per unit of risk. If you would invest  1,412  in Assicurazioni Generali SpA on September 22, 2024 and sell it today you would lose (1.00) from holding Assicurazioni Generali SpA or give up 0.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Assicurazioni Generali SpA  vs.  International General Insuranc

Assicurazioni Generali

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Assicurazioni Generali SpA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Assicurazioni Generali is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

International General

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in International General Insurance are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, International General exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Assicurazioni Generali and International General

The main advantage of trading using opposite Assicurazioni Generali and International General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assicurazioni Generali position performs unexpectedly, International General 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 International General will offset losses from the drop in International General's long position.

The idea behind Assicurazioni Generali SpA and International General Insurance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.