Correlation Between CIC INSURANCE and NATION MEDIA
Can any of the company-specific risk be diversified away by investing in both CIC INSURANCE and NATION MEDIA 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 CIC INSURANCE and NATION MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CIC INSURANCE GROUP and NATION MEDIA GROUP, you can compare the effects of market volatilities on CIC INSURANCE and NATION MEDIA 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 CIC INSURANCE with a short position of NATION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CIC INSURANCE and NATION MEDIA.
Diversification Opportunities for CIC INSURANCE and NATION MEDIA
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between CIC and NATION is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding CIC INSURANCE GROUP and NATION MEDIA GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATION MEDIA GROUP and CIC 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 CIC INSURANCE GROUP are associated (or correlated) with NATION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATION MEDIA GROUP has no effect on the direction of CIC INSURANCE i.e., CIC INSURANCE and NATION MEDIA go up and down completely randomly.
Pair Corralation between CIC INSURANCE and NATION MEDIA
Assuming the 90 days trading horizon CIC INSURANCE GROUP is expected to generate 1.09 times more return on investment than NATION MEDIA. However, CIC INSURANCE is 1.09 times more volatile than NATION MEDIA GROUP. It trades about 0.02 of its potential returns per unit of risk. NATION MEDIA GROUP is currently generating about -0.01 per unit of risk. If you would invest 192.00 in CIC INSURANCE GROUP on September 3, 2024 and sell it today you would earn a total of 12.00 from holding CIC INSURANCE GROUP or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CIC INSURANCE GROUP vs. NATION MEDIA GROUP
Performance |
| Timeline |
| CIC INSURANCE GROUP |
| NATION MEDIA GROUP |
CIC INSURANCE and NATION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CIC INSURANCE and NATION MEDIA
The main advantage of trading using opposite CIC INSURANCE and NATION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CIC INSURANCE position performs unexpectedly, NATION MEDIA 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 NATION MEDIA will offset losses from the drop in NATION MEDIA's long position.| CIC INSURANCE vs. BRITISH AMERICAN TOBACCO | CIC INSURANCE vs. CARBACID INVESTMENTS LTD | CIC INSURANCE vs. KENYA RE INSURANCE PORATION | CIC INSURANCE vs. STANDARD CHARTERED BANK |
| NATION MEDIA vs. CENTUM INVESTMENT PANY | NATION MEDIA vs. ABSA BANK OF | NATION MEDIA vs. HOME AFRIKA LTD | NATION MEDIA vs. HOMEBOYZ ENTERTAINMENT PLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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