Correlation Between Dimension Computer and First Insurance
Can any of the company-specific risk be diversified away by investing in both Dimension Computer 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 Dimension Computer and First Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimension Computer Technology and First Insurance Co, you can compare the effects of market volatilities on Dimension Computer 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 Dimension Computer with a short position of First Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimension Computer and First Insurance.
Diversification Opportunities for Dimension Computer and First Insurance
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dimension and First is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dimension Computer Technology and First Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Insurance and Dimension Computer 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 Dimension Computer Technology 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 Dimension Computer i.e., Dimension Computer and First Insurance go up and down completely randomly.
Pair Corralation between Dimension Computer and First Insurance
Assuming the 90 days trading horizon Dimension Computer is expected to generate 1.02 times less return on investment than First Insurance. In addition to that, Dimension Computer is 3.38 times more volatile than First Insurance Co. It trades about 0.1 of its total potential returns per unit of risk. First Insurance Co is currently generating about 0.35 per unit of volatility. If you would invest 2,240 in First Insurance Co on September 13, 2024 and sell it today you would earn a total of 315.00 from holding First Insurance Co or generate 14.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dimension Computer Technology vs. First Insurance Co
Performance |
| Timeline |
| Dimension Computer |
| First Insurance |
Dimension Computer and First Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimension Computer and First Insurance
The main advantage of trading using opposite Dimension Computer and First Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimension Computer 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.| Dimension Computer vs. RiTdisplay Corp | Dimension Computer vs. Eastern Media International | Dimension Computer vs. Newretail Co | Dimension Computer vs. Ching Feng Home |
| First Insurance vs. Central Reinsurance Corp | First Insurance vs. Huaku Development Co | First Insurance vs. Fubon Financial Holding | First Insurance vs. Chailease Holding 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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