Correlation Between SEKISUI CHEMICAL and Insurance Australia

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Can any of the company-specific risk be diversified away by investing in both SEKISUI CHEMICAL and Insurance Australia 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 SEKISUI CHEMICAL and Insurance Australia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SEKISUI CHEMICAL and Insurance Australia Group, you can compare the effects of market volatilities on SEKISUI CHEMICAL and Insurance Australia 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 SEKISUI CHEMICAL with a short position of Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SEKISUI CHEMICAL and Insurance Australia.

Diversification Opportunities for SEKISUI CHEMICAL and Insurance Australia

SEKISUIInsuranceDiversified AwaySEKISUIInsuranceDiversified Away100%
0.39
  Correlation Coefficient

Weak diversification

The 3 months correlation between SEKISUI and Insurance is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SEKISUI CHEMICAL and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL are associated (or correlated) with Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of SEKISUI CHEMICAL i.e., SEKISUI CHEMICAL and Insurance Australia go up and down completely randomly.

Pair Corralation between SEKISUI CHEMICAL and Insurance Australia

Assuming the 90 days trading horizon SEKISUI CHEMICAL is expected to generate 0.95 times more return on investment than Insurance Australia. However, SEKISUI CHEMICAL is 1.05 times less risky than Insurance Australia. It trades about 0.09 of its potential returns per unit of risk. Insurance Australia Group is currently generating about -0.06 per unit of risk. If you would invest  1,420  in SEKISUI CHEMICAL on November 19, 2024 and sell it today you would earn a total of  150.00  from holding SEKISUI CHEMICAL or generate 10.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SEKISUI CHEMICAL  vs.  Insurance Australia Group

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 051015
JavaScript chart by amCharts 3.21.15SUI NRM
       Timeline  
SEKISUI CHEMICAL 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SEKISUI CHEMICAL are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, SEKISUI CHEMICAL may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1414.51515.51616.5
Insurance Australia 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Insurance Australia Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4.64.74.84.955.15.25.35.4

SEKISUI CHEMICAL and Insurance Australia Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.59-4.94-3.28-1.630.021.73.425.156.88 0.020.030.040.050.060.070.080.09
JavaScript chart by amCharts 3.21.15SUI NRM
       Returns  

Pair Trading with SEKISUI CHEMICAL and Insurance Australia

The main advantage of trading using opposite SEKISUI CHEMICAL and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SEKISUI CHEMICAL position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.
The idea behind SEKISUI CHEMICAL and Insurance Australia 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.
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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