Correlation Between Micro Leasing and Charan Insurance
Can any of the company-specific risk be diversified away by investing in both Micro Leasing and Charan 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 Micro Leasing and Charan Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micro Leasing Public and Charan Insurance Public, you can compare the effects of market volatilities on Micro Leasing and Charan 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 Micro Leasing with a short position of Charan Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micro Leasing and Charan Insurance.
Diversification Opportunities for Micro Leasing and Charan Insurance
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Micro and Charan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Micro Leasing Public and Charan Insurance Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charan Insurance Public and Micro Leasing 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 Micro Leasing Public are associated (or correlated) with Charan Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charan Insurance Public has no effect on the direction of Micro Leasing i.e., Micro Leasing and Charan Insurance go up and down completely randomly.
Pair Corralation between Micro Leasing and Charan Insurance
Assuming the 90 days trading horizon Micro Leasing Public is expected to generate 0.94 times more return on investment than Charan Insurance. However, Micro Leasing Public is 1.06 times less risky than Charan Insurance. It trades about 0.11 of its potential returns per unit of risk. Charan Insurance Public is currently generating about -0.03 per unit of risk. If you would invest 96.00 in Micro Leasing Public on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Micro Leasing Public or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micro Leasing Public vs. Charan Insurance Public
Performance |
| Timeline |
| Micro Leasing Public |
| Charan Insurance Public |
Micro Leasing and Charan Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micro Leasing and Charan Insurance
The main advantage of trading using opposite Micro Leasing and Charan Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micro Leasing position performs unexpectedly, Charan 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 Charan Insurance will offset losses from the drop in Charan Insurance's long position.| Micro Leasing vs. Amanah Leasing Public | Micro Leasing vs. Muangthai Capital Public | Micro Leasing vs. Infraset Public | Micro Leasing vs. JMT Network Services |
| Charan Insurance vs. Thai President Foods | Charan Insurance vs. Chow Steel Industries | Charan Insurance vs. Syntec Construction Public | Charan Insurance vs. Sahamit Machinery Public |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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