Correlation Between International General and Fundamental Global

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

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

Diversification Opportunities for International General and Fundamental Global

0.29

Correlation Coefficient

International General  Fundamental Global

Modest diversification

The 3 months correlation between International and Fundamental is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding International General Insuranc and Fundamental Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundamental Global and International General 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 International General Insurance 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 International General i.e., International General and Fundamental Global go up and down completely randomly.

Pair Corralation between International General and Fundamental Global

Given the investment horizon of 90 days International General is expected to generate 1.24 times less return on investment than Fundamental Global. But when comparing it to its historical volatility, International General Insurance is 3.55 times less risky than Fundamental Global. It trades about 0.25 of its potential returns per unit of risk. Fundamental Global is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,668  in Fundamental Global on August 30, 2024 and sell it today you would earn a total of  731.00  from holding Fundamental Global or generate 27.4% return on investment over 90 days.

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

International General Insuranc  vs.  Fundamental Global

International General

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in International General Insurance are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, International General exhibited solid returns over the last few months and may actually be approaching a breakup point.

Fundamental Global

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fundamental Global are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Fundamental Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with International General and Fundamental Global

The main advantage of trading using opposite International General and Fundamental Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International General 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 International General Insurance 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.