Correlation Between Assicurazioni Generali and Fundamental Global

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

By analyzing existing cross correlation between Assicurazioni Generali SpA and Fundamental Global, you can compare the effects of market volatilities on Assicurazioni Generali and Fundamental Global 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 Assicurazioni Generali with a short position of Fundamental Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assicurazioni Generali and Fundamental Global.

Diversification Opportunities for Assicurazioni Generali and Fundamental Global

0.4

Correlation Coefficient

Assicurazioni Generali  Fundamental Global

Very weak diversification

The 3 months correlation between Assicurazioni and Fundamental is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Assicurazioni Generali SpA and Fundamental Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Global and Assicurazioni Generali 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 Assicurazioni Generali SpA are associated (or correlated) with Fundamental Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundamental Global has no effect on the direction of Assicurazioni Generali i.e., Assicurazioni Generali and Fundamental Global go up and down completely randomly.

Pair Corralation between Assicurazioni Generali and Fundamental Global

Assuming the 90 days horizon Assicurazioni Generali is expected to generate 9.88 times less return on investment than Fundamental Global. But when comparing it to its historical volatility, Assicurazioni Generali SpA is 11.77 times less risky than Fundamental Global. It trades about 0.12 of its potential returns per unit of risk. Fundamental Global is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,529  in Fundamental Global on September 3, 2024 and sell it today you would earn a total of  269.00  from holding Fundamental Global or generate 17.59% return on investment over 90 days.

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

Assicurazioni Generali SpA  vs.  Fundamental Global

Assicurazioni Generali

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Assicurazioni Generali SpA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Assicurazioni Generali is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Fundamental Global

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fundamental Global are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Fundamental Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Assicurazioni Generali and Fundamental Global

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

The idea behind Assicurazioni Generali SpA and Fundamental Global 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.