Correlation Between Yowie and Insignia Financial

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

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

Diversification Opportunities for Yowie and Insignia Financial

-0.54

Correlation Coefficient

Yowie  Insignia Financial

Excellent diversification

The 3 months correlation between Yowie and Insignia is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Yowie Group and Insignia Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insignia Financial and Yowie 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 Yowie Group are associated (or correlated) with Insignia Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insignia Financial has no effect on the direction of Yowie i.e., Yowie and Insignia Financial go up and down completely randomly.

Pair Corralation between Yowie and Insignia Financial

Assuming the 90 days trading horizon Yowie Group is expected to under-perform the Insignia Financial. In addition to that, Yowie is 1.81 times more volatile than Insignia Financial. It trades about -0.07 of its total potential returns per unit of risk. Insignia Financial is currently generating about 0.26 per unit of volatility. If you would invest  358.00  in Insignia Financial on October 16, 2024 and sell it today you would earn a total of  64.00  from holding Insignia Financial or generate 17.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Yowie Group  vs.  Insignia Financial

Yowie Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yowie Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Insignia Financial

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Insignia Financial are ranked lower than 14 (%) 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.

Pair Trading with Yowie and Insignia Financial

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

The idea behind Yowie Group and Insignia Financial 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.