Correlation Between Century Insurance and Quice Food
Can any of the company-specific risk be diversified away by investing in both Century Insurance and Quice Food 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 Century Insurance and Quice Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Insurance and Quice Food Industries, you can compare the effects of market volatilities on Century Insurance and Quice Food 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 Century Insurance with a short position of Quice Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Insurance and Quice Food.
Diversification Opportunities for Century Insurance and Quice Food
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Century and Quice is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Century Insurance and Quice Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quice Food Industries and Century 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 Century Insurance are associated (or correlated) with Quice Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quice Food Industries has no effect on the direction of Century Insurance i.e., Century Insurance and Quice Food go up and down completely randomly.
Pair Corralation between Century Insurance and Quice Food
Assuming the 90 days trading horizon Century Insurance is expected to generate 0.86 times more return on investment than Quice Food. However, Century Insurance is 1.16 times less risky than Quice Food. It trades about 0.38 of its potential returns per unit of risk. Quice Food Industries is currently generating about 0.05 per unit of risk. If you would invest 3,090 in Century Insurance on August 28, 2024 and sell it today you would earn a total of 630.00 from holding Century Insurance or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Insurance vs. Quice Food Industries
Performance |
| Timeline |
| Century Insurance |
| Quice Food Industries |
Century Insurance and Quice Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Insurance and Quice Food
The main advantage of trading using opposite Century Insurance and Quice Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Insurance position performs unexpectedly, Quice Food 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 Quice Food will offset losses from the drop in Quice Food's long position.| Century Insurance vs. Habib Bank | Century Insurance vs. National Bank of | Century Insurance vs. United Bank | Century Insurance vs. MCB Bank |
| Quice Food vs. Masood Textile Mills | Quice Food vs. Fauji Foods | Quice Food vs. KSB Pumps | Quice Food vs. Mari Petroleum |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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