Correlation Between Military Insurance and Asia Commercial
Can any of the company-specific risk be diversified away by investing in both Military Insurance and Asia Commercial 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 Military Insurance and Asia Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Military Insurance Corp and Asia Commercial Bank, you can compare the effects of market volatilities on Military Insurance and Asia Commercial 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 Military Insurance with a short position of Asia Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Military Insurance and Asia Commercial.
Diversification Opportunities for Military Insurance and Asia Commercial
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Military and Asia is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Military Insurance Corp and Asia Commercial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Commercial Bank and Military Insurance 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 Military Insurance Corp are associated (or correlated) with Asia Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Commercial Bank has no effect on the direction of Military Insurance i.e., Military Insurance and Asia Commercial go up and down completely randomly.
Pair Corralation between Military Insurance and Asia Commercial
Assuming the 90 days trading horizon Military Insurance is expected to generate 1.55 times less return on investment than Asia Commercial. In addition to that, Military Insurance is 1.15 times more volatile than Asia Commercial Bank. It trades about 0.03 of its total potential returns per unit of risk. Asia Commercial Bank is currently generating about 0.06 per unit of volatility. If you would invest 1,605,848 in Asia Commercial Bank on September 4, 2024 and sell it today you would earn a total of 909,152 from holding Asia Commercial Bank or generate 56.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Military Insurance Corp vs. Asia Commercial Bank
Performance |
| Timeline |
| Military Insurance Corp |
| Asia Commercial Bank |
Military Insurance and Asia Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Military Insurance and Asia Commercial
The main advantage of trading using opposite Military Insurance and Asia Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Military Insurance position performs unexpectedly, Asia Commercial 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 Asia Commercial will offset losses from the drop in Asia Commercial's long position.| Military Insurance vs. Nafoods Group JSC | Military Insurance vs. Century Synthetic Fiber | Military Insurance vs. Post and Telecommunications | Military Insurance vs. Telecoms Informatics JSC |
| Asia Commercial vs. FIT INVEST JSC | Asia Commercial vs. Damsan JSC | Asia Commercial vs. An Phat Plastic | Asia Commercial vs. Alphanam ME |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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