Correlation Between LANSON BCC and Safety Insurance

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

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

Diversification Opportunities for LANSON BCC and Safety Insurance

-0.68

Correlation Coefficient

LANSON BCC  Safety Insurance

Excellent diversification

The 3 months correlation between LANSON and Safety is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding LANSON BCC INH EO and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance and LANSON BCC 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 LANSON BCC INH EO are associated (or correlated) with Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of LANSON BCC i.e., LANSON BCC and Safety Insurance go up and down completely randomly.

Pair Corralation between LANSON BCC and Safety Insurance

Assuming the 90 days horizon LANSON BCC INH EO is expected to generate 0.92 times more return on investment than Safety Insurance. However, LANSON BCC INH EO is 1.09 times less risky than Safety Insurance. It trades about 0.07 of its potential returns per unit of risk. Safety Insurance Group is currently generating about -0.1 per unit of risk. If you would invest  3,460  in LANSON BCC INH EO on December 24, 2024 and sell it today you would earn a total of  210.00  from holding LANSON BCC INH EO or generate 6.07% return on investment over 90 days.

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

LANSON BCC INH EO  vs.  Safety Insurance Group

LANSON BCC INH

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LANSON BCC INH EO are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, LANSON BCC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Safety Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Safety Insurance Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with LANSON BCC and Safety Insurance

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

The idea behind LANSON BCC INH EO and Safety Insurance 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.