Correlation Between MEYER PLC and AIICO INSURANCE
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By analyzing existing cross correlation between MEYER PLC and AIICO INSURANCE PLC, you can compare the effects of market volatilities on MEYER PLC and AIICO 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 MEYER PLC with a short position of AIICO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEYER PLC and AIICO INSURANCE.
Diversification Opportunities for MEYER PLC and AIICO INSURANCE
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MEYER and AIICO is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding MEYER PLC and AIICO INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIICO INSURANCE PLC and MEYER PLC 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 MEYER PLC are associated (or correlated) with AIICO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIICO INSURANCE PLC has no effect on the direction of MEYER PLC i.e., MEYER PLC and AIICO INSURANCE go up and down completely randomly.
Pair Corralation between MEYER PLC and AIICO INSURANCE
Assuming the 90 days trading horizon MEYER PLC is expected to under-perform the AIICO INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, MEYER PLC is 1.22 times less risky than AIICO INSURANCE. The stock trades about -0.22 of its potential returns per unit of risk. The AIICO INSURANCE PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 120.00 in AIICO INSURANCE PLC on August 28, 2024 and sell it today you would earn a total of 4.00 from holding AIICO INSURANCE PLC or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEYER PLC vs. AIICO INSURANCE PLC
Performance |
| Timeline |
| MEYER PLC |
| AIICO INSURANCE PLC |
MEYER PLC and AIICO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEYER PLC and AIICO INSURANCE
The main advantage of trading using opposite MEYER PLC and AIICO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEYER PLC position performs unexpectedly, AIICO 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 AIICO INSURANCE will offset losses from the drop in AIICO INSURANCE's long position.The idea behind MEYER PLC and AIICO INSURANCE PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AIICO INSURANCE vs. GUINEA INSURANCE PLC | AIICO INSURANCE vs. MEYER PLC | AIICO INSURANCE vs. VETIVA INDUSTRIAL ETF |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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