Correlation Between First Insurance and Shiny Chemical
Can any of the company-specific risk be diversified away by investing in both First Insurance and Shiny 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 Shiny 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 Shiny Chemical Industrial, you can compare the effects of market volatilities on First Insurance and Shiny 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 Shiny Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Insurance and Shiny Chemical.
Diversification Opportunities for First Insurance and Shiny Chemical
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Shiny is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding First Insurance Co and Shiny Chemical Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shiny Chemical Industrial 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 Shiny Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shiny Chemical Industrial has no effect on the direction of First Insurance i.e., First Insurance and Shiny Chemical go up and down completely randomly.
Pair Corralation between First Insurance and Shiny Chemical
Assuming the 90 days trading horizon First Insurance Co is expected to generate 0.53 times more return on investment than Shiny Chemical. However, First Insurance Co is 1.89 times less risky than Shiny Chemical. It trades about 0.34 of its potential returns per unit of risk. Shiny Chemical Industrial is currently generating about -0.1 per unit of risk. If you would invest 2,280 in First Insurance Co on August 30, 2024 and sell it today you would earn a total of 180.00 from holding First Insurance Co or generate 7.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Insurance Co vs. Shiny Chemical Industrial
Performance |
| Timeline |
| First Insurance |
| Shiny Chemical Industrial |
First Insurance and Shiny Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Insurance and Shiny Chemical
The main advantage of trading using opposite First Insurance and Shiny Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Insurance position performs unexpectedly, Shiny 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 Shiny Chemical will offset losses from the drop in Shiny 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 |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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