Correlation Between STANDARD ALLIANCE and DEAP CAPITAL

Can any of the company-specific risk be diversified away by investing in both STANDARD ALLIANCE and DEAP CAPITAL 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 STANDARD ALLIANCE and DEAP CAPITAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between STANDARD ALLIANCE INSURANCE and DEAP CAPITAL MANAGEMENT, you can compare the effects of market volatilities on STANDARD ALLIANCE and DEAP CAPITAL 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 STANDARD ALLIANCE with a short position of DEAP CAPITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of STANDARD ALLIANCE and DEAP CAPITAL.

Diversification Opportunities for STANDARD ALLIANCE and DEAP CAPITAL

0.0

Correlation Coefficient

STANDARD ALLIANCE  DEAP CAPITAL

Pay attention - limited upside

The 3 months correlation between STANDARD and DEAP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STANDARD ALLIANCE INSURANCE and DEAP CAPITAL MANAGEMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEAP CAPITAL MANAGEMENT and STANDARD ALLIANCE 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 STANDARD ALLIANCE INSURANCE are associated (or correlated) with DEAP CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEAP CAPITAL MANAGEMENT has no effect on the direction of STANDARD ALLIANCE i.e., STANDARD ALLIANCE and DEAP CAPITAL go up and down completely randomly.

Pair Corralation between STANDARD ALLIANCE and DEAP CAPITAL

If you would invest  102.00  in DEAP CAPITAL MANAGEMENT on September 12, 2024 and sell it today you would earn a total of  12.00  from holding DEAP CAPITAL MANAGEMENT or generate 11.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

STANDARD ALLIANCE INSURANCE  vs.  DEAP CAPITAL MANAGEMENT

STANDARD ALLIANCE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STANDARD ALLIANCE INSURANCE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, STANDARD ALLIANCE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

DEAP CAPITAL MANAGEMENT

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DEAP CAPITAL MANAGEMENT are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, DEAP CAPITAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with STANDARD ALLIANCE and DEAP CAPITAL

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

The idea behind STANDARD ALLIANCE INSURANCE and DEAP CAPITAL MANAGEMENT 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.