Correlation Between Asia Commercial and Military Insurance
Can any of the company-specific risk be diversified away by investing in both Asia Commercial and Military 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 Asia Commercial and Military Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Commercial Bank and Military Insurance Corp, you can compare the effects of market volatilities on Asia Commercial and Military 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 Asia Commercial with a short position of Military Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Commercial and Military Insurance.
Diversification Opportunities for Asia Commercial and Military Insurance
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asia and Military is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Asia Commercial Bank and Military Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Military Insurance Corp and Asia Commercial 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 Asia Commercial Bank are associated (or correlated) with Military Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Military Insurance Corp has no effect on the direction of Asia Commercial i.e., Asia Commercial and Military Insurance go up and down completely randomly.
Pair Corralation between Asia Commercial and Military Insurance
Assuming the 90 days trading horizon Asia Commercial Bank is expected to generate 0.62 times more return on investment than Military Insurance. However, Asia Commercial Bank is 1.6 times less risky than Military Insurance. It trades about 0.04 of its potential returns per unit of risk. Military Insurance Corp is currently generating about 0.0 per unit of risk. If you would invest 2,470,000 in Asia Commercial Bank on September 3, 2024 and sell it today you would earn a total of 50,000 from holding Asia Commercial Bank or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Commercial Bank vs. Military Insurance Corp
Performance |
| Timeline |
| Asia Commercial Bank |
| Military Insurance Corp |
Asia Commercial and Military Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Commercial and Military Insurance
The main advantage of trading using opposite Asia Commercial and Military Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Commercial position performs unexpectedly, Military 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 Military Insurance will offset losses from the drop in Military Insurance's long position.| Asia Commercial vs. Military Insurance Corp | Asia Commercial vs. Fecon Mining JSC | Asia Commercial vs. Agriculture Printing and | Asia Commercial vs. BaoMinh Insurance Corp |
| Military Insurance vs. Sea Air Freight | Military Insurance vs. Petrolimex Information Technology | Military Insurance vs. Vincom Retail JSC | Military Insurance vs. Ha Noi Education |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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