Correlation Between Apna Microfinance and TPL Insurance
Can any of the company-specific risk be diversified away by investing in both Apna Microfinance and TPL 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 Apna Microfinance and TPL Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apna Microfinance Bank and TPL Insurance, you can compare the effects of market volatilities on Apna Microfinance and TPL 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 Apna Microfinance with a short position of TPL Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apna Microfinance and TPL Insurance.
Diversification Opportunities for Apna Microfinance and TPL Insurance
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apna and TPL is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Apna Microfinance Bank and TPL Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPL Insurance and Apna Microfinance 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 Apna Microfinance Bank are associated (or correlated) with TPL Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPL Insurance has no effect on the direction of Apna Microfinance i.e., Apna Microfinance and TPL Insurance go up and down completely randomly.
Pair Corralation between Apna Microfinance and TPL Insurance
Assuming the 90 days trading horizon Apna Microfinance Bank is expected to under-perform the TPL Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Apna Microfinance Bank is 9.59 times less risky than TPL Insurance. The stock trades about -0.26 of its potential returns per unit of risk. The TPL Insurance is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 979.00 in TPL Insurance on August 24, 2024 and sell it today you would earn a total of 34.00 from holding TPL Insurance or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 65.22% |
| Values | Daily Returns |
Apna Microfinance Bank vs. TPL Insurance
Performance |
| Timeline |
| Apna Microfinance Bank |
| TPL Insurance |
Apna Microfinance and TPL Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apna Microfinance and TPL Insurance
The main advantage of trading using opposite Apna Microfinance and TPL Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apna Microfinance position performs unexpectedly, TPL 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 TPL Insurance will offset losses from the drop in TPL Insurance's long position.| Apna Microfinance vs. Habib Insurance | Apna Microfinance vs. Ghandhara Automobile | Apna Microfinance vs. Century Insurance | Apna Microfinance vs. Reliance Weaving Mills |
| TPL Insurance vs. Soneri Bank | TPL Insurance vs. 786 Investment Limited | TPL Insurance vs. Habib Insurance | TPL Insurance vs. Apna Microfinance 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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