Correlation Between Global Indemnity and Fednat Holding
Can any of the company-specific risk be diversified away by investing in both Global Indemnity and Fednat Holding 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 Global Indemnity and Fednat Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Indemnity PLC and Fednat Holding Co, you can compare the effects of market volatilities on Global Indemnity and Fednat Holding 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 Global Indemnity with a short position of Fednat Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Indemnity and Fednat Holding.
Diversification Opportunities for Global Indemnity and Fednat Holding
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Fednat is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Global Indemnity PLC and Fednat Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fednat Holding and Global Indemnity 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 Global Indemnity PLC are associated (or correlated) with Fednat Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fednat Holding has no effect on the direction of Global Indemnity i.e., Global Indemnity and Fednat Holding go up and down completely randomly.
Pair Corralation between Global Indemnity and Fednat Holding
Given the investment horizon of 90 days Global Indemnity is expected to generate 35.84 times less return on investment than Fednat Holding. But when comparing it to its historical volatility, Global Indemnity PLC is 18.39 times less risky than Fednat Holding. It trades about 0.04 of its potential returns per unit of risk. Fednat Holding Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 43.00 in Fednat Holding Co on January 25, 2024 and sell it today you would lose (42.84) from holding Fednat Holding Co or give up 99.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 38.87% |
Values | Daily Returns |
Global Indemnity PLC vs. Fednat Holding Co
Performance |
Timeline |
Global Indemnity PLC |
Fednat Holding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global Indemnity and Fednat Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global Indemnity and Fednat Holding
The main advantage of trading using opposite Global Indemnity and Fednat Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Indemnity position performs unexpectedly, Fednat Holding 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 Fednat Holding will offset losses from the drop in Fednat Holding's long position.Global Indemnity vs. Aquagold International | Global Indemnity vs. Thrivent High Yield | Global Indemnity vs. Morningstar Unconstrained Allocation | Global Indemnity vs. Via Renewables |
Fednat Holding vs. Highway Holdings Limited | Fednat Holding vs. CECO Environmental Corp | Fednat Holding vs. Tyson Foods | Fednat Holding vs. Bel Fuse A |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |