Correlation Between Insignia Financial and Metals X

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

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

Diversification Opportunities for Insignia Financial and Metals X

-0.04

Correlation Coefficient

Insignia Financial  Metals X

Good diversification

The 3 months correlation between Insignia and Metals is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and Metals X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals X 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 Metals X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals X has no effect on the direction of Insignia Financial i.e., Insignia Financial and Metals X go up and down completely randomly.

Pair Corralation between Insignia Financial and Metals X

Assuming the 90 days trading horizon Insignia Financial is expected to generate 0.73 times more return on investment than Metals X. However, Insignia Financial is 1.38 times less risky than Metals X. It trades about 0.04 of its potential returns per unit of risk. Metals X is currently generating about 0.03 per unit of risk. If you would invest  323.00  in Insignia Financial on October 24, 2024 and sell it today you would earn a total of  122.00  from holding Insignia Financial or generate 37.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Insignia Financial  vs.  Metals X

Insignia Financial

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Insignia Financial are ranked lower than 17 (%) 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.

Metals X

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Metals X are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Metals X may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Insignia Financial and Metals X

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

The idea behind Insignia Financial and Metals X 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.