Correlation Between REVO INSURANCE and Preferred Bank
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE and Preferred Bank 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 REVO INSURANCE and Preferred Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and Preferred Bank, you can compare the effects of market volatilities on REVO INSURANCE and Preferred Bank 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 REVO INSURANCE with a short position of Preferred Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and Preferred Bank.
Diversification Opportunities for REVO INSURANCE and Preferred Bank
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between REVO and Preferred is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and Preferred Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Preferred Bank and REVO 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 REVO INSURANCE SPA are associated (or correlated) with Preferred Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Preferred Bank has no effect on the direction of REVO INSURANCE i.e., REVO INSURANCE and Preferred Bank go up and down completely randomly.
Pair Corralation between REVO INSURANCE and Preferred Bank
Assuming the 90 days horizon REVO INSURANCE SPA is expected to generate 0.95 times more return on investment than Preferred Bank. However, REVO INSURANCE SPA is 1.06 times less risky than Preferred Bank. It trades about 0.13 of its potential returns per unit of risk. Preferred Bank is currently generating about 0.07 per unit of risk. If you would invest 938.00 in REVO INSURANCE SPA on October 12, 2024 and sell it today you would earn a total of 177.00 from holding REVO INSURANCE SPA or generate 18.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.33% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. Preferred Bank
Performance |
| Timeline |
| REVO INSURANCE SPA |
| Preferred Bank |
REVO INSURANCE and Preferred Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and Preferred Bank
The main advantage of trading using opposite REVO INSURANCE and Preferred Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE position performs unexpectedly, Preferred Bank 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 Preferred Bank will offset losses from the drop in Preferred Bank's long position.| REVO INSURANCE vs. The Travelers Companies | REVO INSURANCE vs. SBI Holdings | REVO INSURANCE vs. Airbus SE | REVO INSURANCE vs. Nabtesco Corp |
| Preferred Bank vs. Sun Life Financial | Preferred Bank vs. REVO INSURANCE SPA | Preferred Bank vs. Webster Financial | Preferred Bank vs. UNIQA INSURANCE GR |
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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