Correlation Between EnTie Commercial and First Insurance
Can any of the company-specific risk be diversified away by investing in both EnTie Commercial and First Insurance 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 EnTie Commercial and First Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EnTie Commercial Bank and First Insurance Co, you can compare the effects of market volatilities on EnTie Commercial and First Insurance 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 EnTie Commercial with a short position of First Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnTie Commercial and First Insurance.
Diversification Opportunities for EnTie Commercial and First Insurance
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EnTie and First is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding EnTie Commercial Bank and First Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Insurance and EnTie Commercial 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 EnTie Commercial Bank are associated (or correlated) with First Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Insurance has no effect on the direction of EnTie Commercial i.e., EnTie Commercial and First Insurance go up and down completely randomly.
Pair Corralation between EnTie Commercial and First Insurance
Assuming the 90 days trading horizon EnTie Commercial Bank is expected to under-perform the First Insurance. In addition to that, EnTie Commercial is 1.55 times more volatile than First Insurance Co. It trades about -0.01 of its total potential returns per unit of risk. First Insurance Co is currently generating about 0.14 per unit of volatility. If you would invest 2,450 in First Insurance Co on October 24, 2024 and sell it today you would earn a total of 55.00 from holding First Insurance Co or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EnTie Commercial Bank vs. First Insurance Co
Performance |
| Timeline |
| EnTie Commercial Bank |
| First Insurance |
EnTie Commercial and First Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EnTie Commercial and First Insurance
The main advantage of trading using opposite EnTie Commercial and First Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnTie Commercial position performs unexpectedly, First Insurance 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 Insurance will offset losses from the drop in First Insurance's long position.| EnTie Commercial vs. Union Bank of | EnTie Commercial vs. Bank of Kaohsiung | EnTie Commercial vs. Taiwan Business Bank | EnTie Commercial vs. Chang Hwa Commercial |
| First Insurance vs. EnTie Commercial Bank | First Insurance vs. Union Bank of | First Insurance vs. Bank of Kaohsiung | First Insurance vs. Taiwan Business Bank |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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