Correlation Between FIT INVEST and PVI Reinsurance
Can any of the company-specific risk be diversified away by investing in both FIT INVEST and PVI Reinsurance 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 FIT INVEST and PVI Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIT INVEST JSC and PVI Reinsurance Corp, you can compare the effects of market volatilities on FIT INVEST and PVI Reinsurance 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 FIT INVEST with a short position of PVI Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIT INVEST and PVI Reinsurance.
Diversification Opportunities for FIT INVEST and PVI Reinsurance
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FIT and PVI is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding FIT INVEST JSC and PVI Reinsurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVI Reinsurance Corp and FIT INVEST 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 FIT INVEST JSC are associated (or correlated) with PVI Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVI Reinsurance Corp has no effect on the direction of FIT INVEST i.e., FIT INVEST and PVI Reinsurance go up and down completely randomly.
Pair Corralation between FIT INVEST and PVI Reinsurance
Assuming the 90 days trading horizon FIT INVEST JSC is expected to under-perform the PVI Reinsurance. But the stock apears to be less risky and, when comparing its historical volatility, FIT INVEST JSC is 2.29 times less risky than PVI Reinsurance. The stock trades about -0.11 of its potential returns per unit of risk. The PVI Reinsurance Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,860,000 in PVI Reinsurance Corp on August 25, 2024 and sell it today you would earn a total of 40,000 from holding PVI Reinsurance Corp or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
FIT INVEST JSC vs. PVI Reinsurance Corp
Performance |
| Timeline |
| FIT INVEST JSC |
| PVI Reinsurance Corp |
FIT INVEST and PVI Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIT INVEST and PVI Reinsurance
The main advantage of trading using opposite FIT INVEST and PVI Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIT INVEST position performs unexpectedly, PVI Reinsurance 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 PVI Reinsurance will offset losses from the drop in PVI Reinsurance's long position.| FIT INVEST vs. Damsan JSC | FIT INVEST vs. An Phat Plastic | FIT INVEST vs. APG Securities Joint | FIT INVEST vs. Binhthuan Agriculture Services |
| PVI Reinsurance vs. PVI Holdings | PVI Reinsurance vs. Cuulong Fish JSC | PVI Reinsurance vs. AgriBank Securities JSC | PVI Reinsurance vs. Hai An Transport |
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 Correlations module to find global opportunities by holding instruments from different markets.
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