Correlation Between Atlas Insurance and East West
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and East West 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 Atlas Insurance and East West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Insurance and East West Insurance, you can compare the effects of market volatilities on Atlas Insurance and East West 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 Atlas Insurance with a short position of East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and East West.
Diversification Opportunities for Atlas Insurance and East West
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Atlas and East is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and East West Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West Insurance and Atlas 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 Atlas Insurance are associated (or correlated) with East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Insurance has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and East West go up and down completely randomly.
Pair Corralation between Atlas Insurance and East West
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 1.45 times less return on investment than East West. But when comparing it to its historical volatility, Atlas Insurance is 2.03 times less risky than East West. It trades about 0.11 of its potential returns per unit of risk. East West Insurance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,795 in East West Insurance on October 30, 2024 and sell it today you would earn a total of 934.00 from holding East West Insurance or generate 19.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 18.4% |
| Values | Daily Returns |
Atlas Insurance vs. East West Insurance
Performance |
| Timeline |
| Atlas Insurance |
| East West Insurance |
Atlas Insurance and East West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas Insurance and East West
The main advantage of trading using opposite Atlas Insurance and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, East West 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 East West will offset losses from the drop in East West's long position.| Atlas Insurance vs. Nimir Industrial Chemical | Atlas Insurance vs. Fauji Foods | Atlas Insurance vs. Unilever Pakistan Foods | Atlas Insurance vs. Invest Capital Investment |
| East West vs. Crescent Star Insurance | East West vs. National Foods | East West vs. Century Insurance | East West vs. Bank of Punjab |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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