Correlation Between Arpico Insurance and DFCC Bank
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By analyzing existing cross correlation between Arpico Insurance and DFCC Bank PLC, you can compare the effects of market volatilities on Arpico Insurance and DFCC Bank 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 Arpico Insurance with a short position of DFCC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arpico Insurance and DFCC Bank.
Diversification Opportunities for Arpico Insurance and DFCC Bank
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arpico and DFCC is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Arpico Insurance and DFCC Bank PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFCC Bank PLC and Arpico Insurance 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 Arpico Insurance are associated (or correlated) with DFCC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFCC Bank PLC has no effect on the direction of Arpico Insurance i.e., Arpico Insurance and DFCC Bank go up and down completely randomly.
Pair Corralation between Arpico Insurance and DFCC Bank
Assuming the 90 days trading horizon Arpico Insurance is expected to under-perform the DFCC Bank. In addition to that, Arpico Insurance is 1.35 times more volatile than DFCC Bank PLC. It trades about -0.3 of its total potential returns per unit of risk. DFCC Bank PLC is currently generating about 0.22 per unit of volatility. If you would invest 7,940 in DFCC Bank PLC on August 24, 2024 and sell it today you would earn a total of 580.00 from holding DFCC Bank PLC or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Arpico Insurance vs. DFCC Bank PLC
Performance |
| Timeline |
| Arpico Insurance |
| DFCC Bank PLC |
Arpico Insurance and DFCC Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arpico Insurance and DFCC Bank
The main advantage of trading using opposite Arpico Insurance and DFCC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arpico Insurance position performs unexpectedly, DFCC Bank 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 DFCC Bank will offset losses from the drop in DFCC Bank's long position.| Arpico Insurance vs. HNB Finance | Arpico Insurance vs. Prime Lands Residencies | Arpico Insurance vs. Jat Holdings PLC | Arpico Insurance vs. E M L |
| DFCC Bank vs. HNB Finance | DFCC Bank vs. Prime Lands Residencies | DFCC Bank vs. Jat Holdings PLC | DFCC Bank vs. E M L |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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