Correlation Between Insignia Financial and FSA Group

Can any of the company-specific risk be diversified away by investing in both Insignia Financial and FSA Group 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 Insignia Financial and FSA Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Insignia Financial and FSA Group

0.45

Correlation Coefficient

Insignia Financial  FSA Group

Very weak diversification

The 3 months correlation between Insignia and FSA is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and FSA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FSA Group and Insignia Financial 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 Insignia Financial are associated (or correlated) with FSA Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FSA Group has no effect on the direction of Insignia Financial i.e., Insignia Financial and FSA Group go up and down completely randomly.

Pair Corralation between Insignia Financial and FSA Group

Assuming the 90 days trading horizon Insignia Financial is expected to generate 1.47 times more return on investment than FSA Group. However, Insignia Financial is 1.47 times more volatile than FSA Group. It trades about 0.11 of its potential returns per unit of risk. FSA Group is currently generating about 0.07 per unit of risk. If you would invest  359.00  in Insignia Financial on December 29, 2024 and sell it today you would earn a total of  73.00  from holding Insignia Financial or generate 20.33% return on investment over 90 days.

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

Insignia Financial  vs.  FSA Group

Insignia Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Insignia Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Insignia Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

FSA Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FSA Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FSA Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Insignia Financial and FSA Group

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

The idea behind Insignia Financial and FSA 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.