Correlation Between Peoples Insurance and Hub Cyber

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

By analyzing existing cross correlation between The Peoples Insurance and Hub Cyber Security, you can compare the effects of market volatilities on Peoples Insurance and Hub Cyber 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 Peoples Insurance with a short position of Hub Cyber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peoples Insurance and Hub Cyber.

Diversification Opportunities for Peoples Insurance and Hub Cyber

-0.09

Correlation Coefficient

Peoples Insurance  Hub Cyber

Good diversification

The 3 months correlation between Peoples and Hub is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Peoples Insurance and Hub Cyber Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub Cyber Security and Peoples 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 The Peoples Insurance are associated (or correlated) with Hub Cyber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub Cyber Security has no effect on the direction of Peoples Insurance i.e., Peoples Insurance and Hub Cyber go up and down completely randomly.

Pair Corralation between Peoples Insurance and Hub Cyber

Assuming the 90 days horizon Peoples Insurance is expected to generate 5.48 times less return on investment than Hub Cyber. But when comparing it to its historical volatility, The Peoples Insurance is 5.93 times less risky than Hub Cyber. It trades about 0.13 of its potential returns per unit of risk. Hub Cyber Security is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1.40  in Hub Cyber Security on December 20, 2024 and sell it today you would earn a total of  0.84  from holding Hub Cyber Security or generate 60.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

The Peoples Insurance  vs.  Hub Cyber Security

Peoples Insurance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Peoples Insurance are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Peoples Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Hub Cyber Security

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hub Cyber Security are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Hub Cyber showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Peoples Insurance and Hub Cyber

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

The idea behind The Peoples Insurance and Hub Cyber Security 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.