Correlation Between Military Insurance and APG Securities
Can any of the company-specific risk be diversified away by investing in both Military Insurance and APG Securities 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 APG Securities 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 APG Securities Joint, you can compare the effects of market volatilities on Military Insurance and APG Securities 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 APG Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Military Insurance and APG Securities.
Diversification Opportunities for Military Insurance and APG Securities
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Military and APG is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Military Insurance Corp and APG Securities Joint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APG Securities Joint 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 APG Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APG Securities Joint has no effect on the direction of Military Insurance i.e., Military Insurance and APG Securities go up and down completely randomly.
Pair Corralation between Military Insurance and APG Securities
Assuming the 90 days trading horizon Military Insurance Corp is expected to under-perform the APG Securities. But the stock apears to be less risky and, when comparing its historical volatility, Military Insurance Corp is 3.75 times less risky than APG Securities. The stock trades about -0.04 of its potential returns per unit of risk. The APG Securities Joint is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 608,000 in APG Securities Joint on November 7, 2024 and sell it today you would earn a total of 190,000 from holding APG Securities Joint or generate 31.25% 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. APG Securities Joint
Performance |
| Timeline |
| Military Insurance Corp |
| APG Securities Joint |
Military Insurance and APG Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Military Insurance and APG Securities
The main advantage of trading using opposite Military Insurance and APG Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Military Insurance position performs unexpectedly, APG Securities 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 APG Securities will offset losses from the drop in APG Securities' long position.| Military Insurance vs. Elcom Technology Communications | Military Insurance vs. Transport and Industry | Military Insurance vs. Binhthuan Agriculture Services | Military Insurance vs. Vietnam JSCmmercial Bank |
| APG Securities vs. Elcom Technology Communications | APG Securities vs. Innovative Technology Development | APG Securities vs. Hai An Transport | APG Securities vs. Transport and Industry |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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