Correlation Between Agritech and Premier Insurance
Can any of the company-specific risk be diversified away by investing in both Agritech and Premier 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 Agritech and Premier Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agritech and Premier Insurance, you can compare the effects of market volatilities on Agritech and Premier 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 Agritech with a short position of Premier Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agritech and Premier Insurance.
Diversification Opportunities for Agritech and Premier Insurance
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agritech and Premier is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Agritech and Premier Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Insurance and Agritech 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 Agritech are associated (or correlated) with Premier Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Insurance has no effect on the direction of Agritech i.e., Agritech and Premier Insurance go up and down completely randomly.
Pair Corralation between Agritech and Premier Insurance
Assuming the 90 days trading horizon Agritech is expected to generate 0.39 times more return on investment than Premier Insurance. However, Agritech is 2.56 times less risky than Premier Insurance. It trades about 0.18 of its potential returns per unit of risk. Premier Insurance is currently generating about -0.09 per unit of risk. If you would invest 3,714 in Agritech on August 28, 2024 and sell it today you would earn a total of 244.00 from holding Agritech or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.95% |
| Values | Daily Returns |
Agritech vs. Premier Insurance
Performance |
| Timeline |
| Agritech |
| Premier Insurance |
Agritech and Premier Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agritech and Premier Insurance
The main advantage of trading using opposite Agritech and Premier Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agritech position performs unexpectedly, Premier 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 Premier Insurance will offset losses from the drop in Premier Insurance's long position.| Agritech vs. Masood Textile Mills | Agritech vs. Fauji Foods | Agritech vs. KSB Pumps | Agritech vs. Mari Petroleum |
| Premier Insurance vs. Habib Bank | Premier Insurance vs. National Bank of | Premier Insurance vs. United Bank | Premier Insurance vs. MCB 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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