Correlation Between ABC TRANSPORT and STACO INSURANCE

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Can any of the company-specific risk be diversified away by investing in both ABC TRANSPORT and STACO 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 ABC TRANSPORT and STACO INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABC TRANSPORT PLC and STACO INSURANCE PLC, you can compare the effects of market volatilities on ABC TRANSPORT and STACO 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 ABC TRANSPORT with a short position of STACO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABC TRANSPORT and STACO INSURANCE.

Diversification Opportunities for ABC TRANSPORT and STACO INSURANCE

ABCSTACODiversified AwayABCSTACODiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between ABC and STACO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ABC TRANSPORT PLC and STACO INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STACO INSURANCE PLC and ABC TRANSPORT 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 ABC TRANSPORT PLC are associated (or correlated) with STACO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STACO INSURANCE PLC has no effect on the direction of ABC TRANSPORT i.e., ABC TRANSPORT and STACO INSURANCE go up and down completely randomly.

Pair Corralation between ABC TRANSPORT and STACO INSURANCE

If you would invest  36.00  in ABC TRANSPORT PLC on December 12, 2024 and sell it today you would earn a total of  114.00  from holding ABC TRANSPORT PLC or generate 316.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy98.56%
ValuesDaily Returns

ABC TRANSPORT PLC  vs.  STACO INSURANCE PLC

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0102030
JavaScript chart by amCharts 3.21.15ABCTRANS STACO
       Timeline  
ABC TRANSPORT PLC 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ABC TRANSPORT PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, ABC TRANSPORT displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar1.11.21.31.41.51.61.7
STACO INSURANCE PLC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days STACO INSURANCE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, STACO INSURANCE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15JanFebMarFebMar0.480.485

ABC TRANSPORT and STACO INSURANCE Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-12.51-9.37-6.23-3.090.05243.396.7810.1713.56 0.0050.0100.0150.020
JavaScript chart by amCharts 3.21.15ABCTRANS STACO
       Returns  

Pair Trading with ABC TRANSPORT and STACO INSURANCE

The main advantage of trading using opposite ABC TRANSPORT and STACO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABC TRANSPORT position performs unexpectedly, STACO 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 STACO INSURANCE will offset losses from the drop in STACO INSURANCE's long position.
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The idea behind ABC TRANSPORT PLC and STACO INSURANCE PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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