Correlation Between REVO INSURANCE and CRAWFORD +

Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE and CRAWFORD + 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 REVO INSURANCE and CRAWFORD + into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between REVO INSURANCE SPA and CRAWFORD A NV, you can compare the effects of market volatilities on REVO INSURANCE and CRAWFORD + 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 REVO INSURANCE with a short position of CRAWFORD +. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and CRAWFORD +.

Diversification Opportunities for REVO INSURANCE and CRAWFORD +

0.63

Correlation Coefficient

REVO INSURANCE  CRAWFORD +

Poor diversification

The 3 months correlation between REVO and CRAWFORD is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and CRAWFORD A NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRAWFORD A NV and REVO INSURANCE 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 REVO INSURANCE SPA are associated (or correlated) with CRAWFORD +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRAWFORD A NV has no effect on the direction of REVO INSURANCE i.e., REVO INSURANCE and CRAWFORD + go up and down completely randomly.

Pair Corralation between REVO INSURANCE and CRAWFORD +

Assuming the 90 days horizon REVO INSURANCE is expected to generate 2.24 times less return on investment than CRAWFORD +. But when comparing it to its historical volatility, REVO INSURANCE SPA is 2.34 times less risky than CRAWFORD +. It trades about 0.06 of its potential returns per unit of risk. CRAWFORD A NV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  545.00  in CRAWFORD A NV on October 10, 2024 and sell it today you would earn a total of  495.00  from holding CRAWFORD A NV or generate 90.83% return on investment over 90 days.

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

REVO INSURANCE SPA  vs.  CRAWFORD A NV

REVO INSURANCE SPA

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in REVO INSURANCE SPA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, REVO INSURANCE reported solid returns over the last few months and may actually be approaching a breakup point.

CRAWFORD A NV

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CRAWFORD A NV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking signals, CRAWFORD + is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with REVO INSURANCE and CRAWFORD +

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

The idea behind REVO INSURANCE SPA and CRAWFORD A NV 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.