Correlation Between First Insurance and Dynamic Medical
Can any of the company-specific risk be diversified away by investing in both First Insurance and Dynamic Medical 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 Dynamic Medical 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 Dynamic Medical Technologies, you can compare the effects of market volatilities on First Insurance and Dynamic Medical 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 Dynamic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Insurance and Dynamic Medical.
Diversification Opportunities for First Insurance and Dynamic Medical
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Dynamic is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding First Insurance Co and Dynamic Medical Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Medical Tech 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 Dynamic Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Medical Tech has no effect on the direction of First Insurance i.e., First Insurance and Dynamic Medical go up and down completely randomly.
Pair Corralation between First Insurance and Dynamic Medical
Assuming the 90 days trading horizon First Insurance Co is expected to under-perform the Dynamic Medical. In addition to that, First Insurance is 1.13 times more volatile than Dynamic Medical Technologies. It trades about -0.17 of its total potential returns per unit of risk. Dynamic Medical Technologies is currently generating about -0.16 per unit of volatility. If you would invest 9,230 in Dynamic Medical Technologies on October 12, 2024 and sell it today you would lose (260.00) from holding Dynamic Medical Technologies or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Insurance Co vs. Dynamic Medical Technologies
Performance |
| Timeline |
| First Insurance |
| Dynamic Medical Tech |
First Insurance and Dynamic Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Insurance and Dynamic Medical
The main advantage of trading using opposite First Insurance and Dynamic Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Insurance position performs unexpectedly, Dynamic Medical 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 Dynamic Medical will offset losses from the drop in Dynamic Medical'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 |
| Dynamic Medical vs. Weltrend Semiconductor | Dynamic Medical vs. Sinopower Semiconductor | Dynamic Medical vs. FDC International Hotels | Dynamic Medical vs. Grand Ocean Retail |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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