Correlation Between Fortune Minerals and Insurance Australia

Can any of the company-specific risk be diversified away by investing in both Fortune Minerals and Insurance Australia 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 Fortune Minerals and Insurance Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fortune Minerals and Insurance Australia Group, you can compare the effects of market volatilities on Fortune Minerals and Insurance Australia 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 Fortune Minerals with a short position of Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Minerals and Insurance Australia.

Diversification Opportunities for Fortune Minerals and Insurance Australia

0.0

Correlation Coefficient

Fortune Minerals  Insurance Australia

Pay attention - limited upside

The 3 months correlation between Fortune and Insurance is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Minerals and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia and Fortune Minerals 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 Fortune Minerals are associated (or correlated) with Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of Fortune Minerals i.e., Fortune Minerals and Insurance Australia go up and down completely randomly.

Pair Corralation between Fortune Minerals and Insurance Australia

If you would invest  4.10  in Fortune Minerals on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Fortune Minerals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	88.24%
Values	Daily Returns

Fortune Minerals  vs.  Insurance Australia Group

Fortune Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fortune Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Fortune Minerals is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Insurance Australia

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Insurance Australia Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Insurance Australia may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Fortune Minerals and Insurance Australia

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

The idea behind Fortune Minerals and Insurance Australia Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.