Correlation Between Arpico Insurance and Nations Trust
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By analyzing existing cross correlation between Arpico Insurance and Nations Trust Bank, you can compare the effects of market volatilities on Arpico Insurance and Nations Trust 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 Nations Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arpico Insurance and Nations Trust.
Diversification Opportunities for Arpico Insurance and Nations Trust
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Arpico and Nations is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Arpico Insurance and Nations Trust Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nations Trust Bank 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 Nations Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nations Trust Bank has no effect on the direction of Arpico Insurance i.e., Arpico Insurance and Nations Trust go up and down completely randomly.
Pair Corralation between Arpico Insurance and Nations Trust
Assuming the 90 days trading horizon Arpico Insurance is expected to generate 1.93 times less return on investment than Nations Trust. In addition to that, Arpico Insurance is 1.66 times more volatile than Nations Trust Bank. It trades about 0.11 of its total potential returns per unit of risk. Nations Trust Bank is currently generating about 0.35 per unit of volatility. If you would invest 14,225 in Nations Trust Bank on September 13, 2024 and sell it today you would earn a total of 1,625 from holding Nations Trust Bank or generate 11.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 72.73% |
| Values | Daily Returns |
Arpico Insurance vs. Nations Trust Bank
Performance |
| Timeline |
| Arpico Insurance |
| Nations Trust Bank |
Arpico Insurance and Nations Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arpico Insurance and Nations Trust
The main advantage of trading using opposite Arpico Insurance and Nations Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arpico Insurance position performs unexpectedly, Nations Trust 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 Nations Trust will offset losses from the drop in Nations Trust's long position.| Arpico Insurance vs. Jat Holdings PLC | Arpico Insurance vs. Lanka Credit and | Arpico Insurance vs. VIDULLANKA PLC | Arpico Insurance vs. Carson Cumberbatch PLC |
| Nations Trust vs. Tal Lanka Hotels | Nations Trust vs. SERENDIB HOTELS PLC | Nations Trust vs. BROWNS INVESTMENTS PLC | Nations Trust vs. Eden Hotel Lanka |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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