Correlation Between First Insurance and Standard Chemical
Can any of the company-specific risk be diversified away by investing in both First Insurance and Standard Chemical 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 First Insurance and Standard Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Insurance Co and Standard Chemical Pharmaceutical, you can compare the effects of market volatilities on First Insurance and Standard Chemical 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 First Insurance with a short position of Standard Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Insurance and Standard Chemical.
Diversification Opportunities for First Insurance and Standard Chemical
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Standard is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding First Insurance Co and Standard Chemical Pharmaceutic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Chemical and First 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 First Insurance Co are associated (or correlated) with Standard Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Chemical has no effect on the direction of First Insurance i.e., First Insurance and Standard Chemical go up and down completely randomly.
Pair Corralation between First Insurance and Standard Chemical
Assuming the 90 days trading horizon First Insurance Co is expected to generate 0.78 times more return on investment than Standard Chemical. However, First Insurance Co is 1.29 times less risky than Standard Chemical. It trades about 0.07 of its potential returns per unit of risk. Standard Chemical Pharmaceutical is currently generating about 0.02 per unit of risk. If you would invest 1,695 in First Insurance Co on November 19, 2024 and sell it today you would earn a total of 825.00 from holding First Insurance Co or generate 48.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
First Insurance Co vs. Standard Chemical Pharmaceutic
Performance |
| Timeline |
| First Insurance |
| Standard Chemical |
First Insurance and Standard Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Insurance and Standard Chemical
The main advantage of trading using opposite First Insurance and Standard Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Insurance position performs unexpectedly, Standard Chemical 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 Standard Chemical will offset losses from the drop in Standard Chemical's long position.| First Insurance vs. EnTie Commercial Bank | First Insurance vs. Union Bank of | First Insurance vs. Bank of Kaohsiung | First Insurance vs. Taiwan Business Bank |
| Standard Chemical vs. Sinphar Pharmaceutical Co | Standard Chemical vs. Grape King Bio | Standard Chemical vs. Apex Biotechnology Corp | Standard Chemical vs. Maywufa 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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