Correlation Between House Of and National Reinsurance
Can any of the company-specific risk be diversified away by investing in both House Of and National 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 House Of and National Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between House of Investments and National Reinsurance, you can compare the effects of market volatilities on House Of and National 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 House Of with a short position of National Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of House Of and National Reinsurance.
Diversification Opportunities for House Of and National Reinsurance
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between House and National is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding House of Investments and National Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Reinsurance and House Of 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 House of Investments are associated (or correlated) with National Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Reinsurance has no effect on the direction of House Of i.e., House Of and National Reinsurance go up and down completely randomly.
Pair Corralation between House Of and National Reinsurance
Assuming the 90 days trading horizon House of Investments is expected to generate 0.99 times more return on investment than National Reinsurance. However, House of Investments is 1.01 times less risky than National Reinsurance. It trades about 0.05 of its potential returns per unit of risk. National Reinsurance is currently generating about -0.21 per unit of risk. If you would invest 342.00 in House of Investments on November 5, 2024 and sell it today you would earn a total of 6.00 from holding House of Investments or generate 1.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 70.0% |
Values | Daily Returns |
House of Investments vs. National Reinsurance
Performance |
Timeline |
House of Investments |
National Reinsurance |
House Of and National Reinsurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with House Of and National Reinsurance
The main advantage of trading using opposite House Of and National Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if House Of position performs unexpectedly, National 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 National Reinsurance will offset losses from the drop in National Reinsurance's long position.House Of vs. SM Investments Corp | House Of vs. National Reinsurance | House Of vs. Metropolitan Bank Trust | House Of vs. BDO Unibank |
National Reinsurance vs. Manila Mining Corp | National Reinsurance vs. East West Banking | National Reinsurance vs. SM Investments Corp | National Reinsurance vs. Philippine Business Bank |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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