Correlation Between Leatec Fine and First Insurance
Can any of the company-specific risk be diversified away by investing in both Leatec Fine 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 Leatec Fine and First Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leatec Fine Ceramics and First Insurance Co, you can compare the effects of market volatilities on Leatec Fine 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 Leatec Fine with a short position of First Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leatec Fine and First Insurance.
Diversification Opportunities for Leatec Fine and First Insurance
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Leatec and First is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Leatec Fine Ceramics and First Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Insurance and Leatec Fine 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 Leatec Fine Ceramics 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 Leatec Fine i.e., Leatec Fine and First Insurance go up and down completely randomly.
Pair Corralation between Leatec Fine and First Insurance
Assuming the 90 days trading horizon Leatec Fine is expected to generate 4.0 times less return on investment than First Insurance. In addition to that, Leatec Fine is 2.12 times more volatile than First Insurance Co. It trades about 0.05 of its total potential returns per unit of risk. First Insurance Co is currently generating about 0.39 per unit of volatility. If you would invest 2,275 in First Insurance Co on September 1, 2024 and sell it today you would earn a total of 210.00 from holding First Insurance Co or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Leatec Fine Ceramics vs. First Insurance Co
Performance |
| Timeline |
| Leatec Fine Ceramics |
| First Insurance |
Leatec Fine and First Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leatec Fine and First Insurance
The main advantage of trading using opposite Leatec Fine and First Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leatec Fine 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.| Leatec Fine vs. First Insurance Co | Leatec Fine vs. Sports Gear Co | Leatec Fine vs. Evergreen International Storage | Leatec Fine vs. Information Technology Total |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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