Correlation Between Military Insurance and Asia Pacific
Can any of the company-specific risk be diversified away by investing in both Military Insurance and Asia Pacific 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 Pacific 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 Pacific Investment, you can compare the effects of market volatilities on Military Insurance and Asia Pacific 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 Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Military Insurance and Asia Pacific.
Diversification Opportunities for Military Insurance and Asia Pacific
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Military and Asia is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Military Insurance Corp and Asia Pacific Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Investment 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 Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Investment has no effect on the direction of Military Insurance i.e., Military Insurance and Asia Pacific go up and down completely randomly.
Pair Corralation between Military Insurance and Asia Pacific
Assuming the 90 days trading horizon Military Insurance Corp is expected to generate 0.8 times more return on investment than Asia Pacific. However, Military Insurance Corp is 1.25 times less risky than Asia Pacific. It trades about -0.17 of its potential returns per unit of risk. Asia Pacific Investment is currently generating about -0.17 per unit of risk. If you would invest 1,815,000 in Military Insurance Corp on October 21, 2024 and sell it today you would lose (115,000) from holding Military Insurance Corp or give up 6.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Military Insurance Corp vs. Asia Pacific Investment
Performance |
| Timeline |
| Military Insurance Corp |
| Asia Pacific Investment |
Military Insurance and Asia Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Military Insurance and Asia Pacific
The main advantage of trading using opposite Military Insurance and Asia Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Military Insurance position performs unexpectedly, Asia Pacific 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 Pacific will offset losses from the drop in Asia Pacific's long position.| Military Insurance vs. Pacific Petroleum Transportation | Military Insurance vs. Petrovietnam Drilling Mud | Military Insurance vs. Nam Kim Steel | Military Insurance vs. Agriculture Printing and |
| Asia Pacific vs. Sao Ta Foods | Asia Pacific vs. Petrovietnam Technical Services | Asia Pacific vs. FPT Digital Retail | Asia Pacific vs. Saigon Beer Alcohol |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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