Correlation Between Union Insurance and Air Asia
Can any of the company-specific risk be diversified away by investing in both Union Insurance and Air Asia 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 Union Insurance and Air Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Union Insurance Co and Air Asia Co, you can compare the effects of market volatilities on Union Insurance and Air Asia 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 Union Insurance with a short position of Air Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Insurance and Air Asia.
Diversification Opportunities for Union Insurance and Air Asia
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Union and Air is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Union Insurance Co and Air Asia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Asia and Union Insurance 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 Union Insurance Co are associated (or correlated) with Air Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Asia has no effect on the direction of Union Insurance i.e., Union Insurance and Air Asia go up and down completely randomly.
Pair Corralation between Union Insurance and Air Asia
Assuming the 90 days trading horizon Union Insurance Co is expected to generate 0.7 times more return on investment than Air Asia. However, Union Insurance Co is 1.43 times less risky than Air Asia. It trades about 0.03 of its potential returns per unit of risk. Air Asia Co is currently generating about -0.04 per unit of risk. If you would invest 3,000 in Union Insurance Co on October 12, 2024 and sell it today you would earn a total of 175.00 from holding Union Insurance Co or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Insurance Co vs. Air Asia Co
Performance |
| Timeline |
| Union Insurance |
| Air Asia |
Union Insurance and Air Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Union Insurance and Air Asia
The main advantage of trading using opposite Union Insurance and Air Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Insurance position performs unexpectedly, Air Asia 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 Air Asia will offset losses from the drop in Air Asia's long position.| Union Insurance vs. Shinkong Insurance Co | Union Insurance vs. Central Reinsurance Corp | Union Insurance vs. Taiwan Fire Marine | Union Insurance vs. Taichung Commercial Bank |
| Air Asia vs. Oceanic Beverages Co | Air Asia vs. Mercuries Life Insurance | Air Asia vs. Dadi Early Childhood Education | Air Asia vs. Union Insurance Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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