Correlation Between Hiscox and First

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

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

Diversification Opportunities for Hiscox and First

0.77

Correlation Coefficient

Hiscox  First

Poor diversification

The 3 months correlation between Hiscox and First is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Hiscox and First Class Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Class Metals and Hiscox 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 Hiscox are associated (or correlated) with First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Class Metals has no effect on the direction of Hiscox i.e., Hiscox and First go up and down completely randomly.

Pair Corralation between Hiscox and First

Assuming the 90 days trading horizon Hiscox is expected to generate 10.79 times less return on investment than First. But when comparing it to its historical volatility, Hiscox is 8.86 times less risky than First. It trades about 0.13 of its potential returns per unit of risk. First Class Metals is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  93.00  in First Class Metals on April 22, 2025 and sell it today you would earn a total of  117.00  from holding First Class Metals or generate 125.81% return on investment over 90 days.

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

Hiscox  vs.  First Class Metals

Hiscox

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hiscox are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Hiscox may actually be approaching a critical reversion point that can send shares even higher in August 2025.

First Class Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Class Metals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, First exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hiscox and First

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

The idea behind Hiscox and First Class Metals 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.