Correlation Between Insignia Financial and Sims
Can any of the company-specific risk be diversified away by investing in both Insignia Financial and Sims 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 Sims into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insignia Financial and Sims, you can compare the effects of market volatilities on Insignia Financial and Sims 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 Sims. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and Sims.
Diversification Opportunities for Insignia Financial and Sims
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Insignia and Sims is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and Sims in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims 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 Sims. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims has no effect on the direction of Insignia Financial i.e., Insignia Financial and Sims go up and down completely randomly.
Pair Corralation between Insignia Financial and Sims
Assuming the 90 days trading horizon Insignia Financial is expected to generate 1.45 times more return on investment than Sims. However, Insignia Financial is 1.45 times more volatile than Sims. It trades about 0.08 of its potential returns per unit of risk. Sims is currently generating about -0.03 per unit of risk. If you would invest 330.00 in Insignia Financial on October 6, 2024 and sell it today you would earn a total of 24.00 from holding Insignia Financial or generate 7.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 97.62% |
Values | Daily Returns |
Insignia Financial vs. Sims
Performance |
Timeline |
Insignia Financial |
Sims |
Insignia Financial and Sims Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Insignia Financial and Sims
The main advantage of trading using opposite Insignia Financial and Sims positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia Financial position performs unexpectedly, Sims 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 Sims will offset losses from the drop in Sims' long position.Insignia Financial vs. Flagship Investments | Insignia Financial vs. Air New Zealand | Insignia Financial vs. Queste Communications | Insignia Financial vs. Sandon Capital Investments |
Sims vs. Viva Leisure | Sims vs. Hawsons Iron | Sims vs. Dexus Convenience Retail | Sims vs. Bisalloy Steel Group |
Check out your portfolio center.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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |