Correlation Between International Steels and Century Insurance
Can any of the company-specific risk be diversified away by investing in both International Steels and Century Insurance 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 International Steels and Century Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Steels and Century Insurance, you can compare the effects of market volatilities on International Steels and Century Insurance 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 International Steels with a short position of Century Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Steels and Century Insurance.
Diversification Opportunities for International Steels and Century Insurance
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between International and Century is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding International Steels and Century Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Insurance and International Steels 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 International Steels are associated (or correlated) with Century Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Insurance has no effect on the direction of International Steels i.e., International Steels and Century Insurance go up and down completely randomly.
Pair Corralation between International Steels and Century Insurance
Assuming the 90 days trading horizon International Steels is expected to generate 1.53 times more return on investment than Century Insurance. However, International Steels is 1.53 times more volatile than Century Insurance. It trades about 0.16 of its potential returns per unit of risk. Century Insurance is currently generating about 0.21 per unit of risk. If you would invest 7,101 in International Steels on October 25, 2024 and sell it today you would earn a total of 2,074 from holding International Steels or generate 29.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.16% |
| Values | Daily Returns |
International Steels vs. Century Insurance
Performance |
| Timeline |
| International Steels |
| Century Insurance |
International Steels and Century Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Steels and Century Insurance
The main advantage of trading using opposite International Steels and Century Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Steels position performs unexpectedly, Century Insurance 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 Century Insurance will offset losses from the drop in Century Insurance's long position.| International Steels vs. JS Investments | International Steels vs. Bank of Punjab | International Steels vs. Sardar Chemical Industries | International Steels vs. Synthetic Products Enterprises |
| Century Insurance vs. Lotte Chemical Pakistan | Century Insurance vs. Metropolitan Steel Corp | Century Insurance vs. Engro Polymer Chemicals | Century Insurance vs. ORIX Leasing Pakistan |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |