Correlation Between MSAD INSURANCE and CK Infrastructure
Can any of the company-specific risk be diversified away by investing in both MSAD INSURANCE and CK Infrastructure 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 MSAD INSURANCE and CK Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSAD INSURANCE and CK Infrastructure Holdings, you can compare the effects of market volatilities on MSAD INSURANCE and CK Infrastructure 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 MSAD INSURANCE with a short position of CK Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSAD INSURANCE and CK Infrastructure.
Diversification Opportunities for MSAD INSURANCE and CK Infrastructure
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MSAD and CHH is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding MSAD INSURANCE and CK Infrastructure Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Infrastructure and MSAD 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 MSAD INSURANCE are associated (or correlated) with CK Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Infrastructure has no effect on the direction of MSAD INSURANCE i.e., MSAD INSURANCE and CK Infrastructure go up and down completely randomly.
Pair Corralation between MSAD INSURANCE and CK Infrastructure
Assuming the 90 days trading horizon MSAD INSURANCE is expected to under-perform the CK Infrastructure. But the stock apears to be less risky and, when comparing its historical volatility, MSAD INSURANCE is 1.23 times less risky than CK Infrastructure. The stock trades about -0.2 of its potential returns per unit of risk. The CK Infrastructure Holdings is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 635.00 in CK Infrastructure Holdings on October 20, 2024 and sell it today you would earn a total of 20.00 from holding CK Infrastructure Holdings or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
MSAD INSURANCE vs. CK Infrastructure Holdings
Performance |
| Timeline |
| MSAD INSURANCE |
| CK Infrastructure |
MSAD INSURANCE and CK Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSAD INSURANCE and CK Infrastructure
The main advantage of trading using opposite MSAD INSURANCE and CK Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSAD INSURANCE position performs unexpectedly, CK Infrastructure 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 CK Infrastructure will offset losses from the drop in CK Infrastructure's long position.| MSAD INSURANCE vs. Air New Zealand | MSAD INSURANCE vs. CHRYSALIS INVESTMENTS LTD | MSAD INSURANCE vs. MEDCAW INVESTMENTS LS 01 | MSAD INSURANCE vs. MidCap Financial Investment |
| CK Infrastructure vs. Duke Energy | CK Infrastructure vs. WEC Energy Group | CK Infrastructure vs. ENDESA ADR 12 | CK Infrastructure vs. CMS Energy |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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