Correlation Between Tokio Marine and Peoples Insurance
Can any of the company-specific risk be diversified away by investing in both Tokio Marine and Peoples 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 Tokio Marine and Peoples Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokio Marine Holdings and The Peoples Insurance, you can compare the effects of market volatilities on Tokio Marine and Peoples 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 Tokio Marine with a short position of Peoples Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokio Marine and Peoples Insurance.
Diversification Opportunities for Tokio Marine and Peoples Insurance
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tokio and Peoples is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tokio Marine Holdings and The Peoples Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Insurance and Tokio Marine 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 Tokio Marine Holdings are associated (or correlated) with Peoples Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Insurance has no effect on the direction of Tokio Marine i.e., Tokio Marine and Peoples Insurance go up and down completely randomly.
Pair Corralation between Tokio Marine and Peoples Insurance
Assuming the 90 days horizon Tokio Marine Holdings is expected to generate 0.95 times more return on investment than Peoples Insurance. However, Tokio Marine Holdings is 1.06 times less risky than Peoples Insurance. It trades about 0.15 of its potential returns per unit of risk. The Peoples Insurance is currently generating about -0.08 per unit of risk. If you would invest 3,285 in Tokio Marine Holdings on August 29, 2024 and sell it today you would earn a total of 241.00 from holding Tokio Marine Holdings or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tokio Marine Holdings vs. The Peoples Insurance
Performance |
| Timeline |
| Tokio Marine Holdings |
| Peoples Insurance |
Tokio Marine and Peoples Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokio Marine and Peoples Insurance
The main advantage of trading using opposite Tokio Marine and Peoples Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokio Marine position performs unexpectedly, Peoples 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 Peoples Insurance will offset losses from the drop in Peoples Insurance's long position.| Tokio Marine vs. Sabra Health Care | Tokio Marine vs. CHINA EDUCATION GROUP | Tokio Marine vs. Strategic Education | Tokio Marine vs. Diamondrock Hospitality Co |
| Peoples Insurance vs. Tokio Marine Holdings | Peoples Insurance vs. Beazley PLC | Peoples Insurance vs. The Hanover Insurance |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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