Correlation Between Military Insurance and Dong A

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Can any of the company-specific risk be diversified away by investing in both Military Insurance and Dong A 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 Dong A 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 Dong A Hotel, you can compare the effects of market volatilities on Military Insurance and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Military Insurance and Dong A.

Diversification Opportunities for Military Insurance and Dong A

MilitaryDongDiversified AwayMilitaryDongDiversified Away100%
0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between Military and Dong is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Military Insurance Corp and Dong A Hotel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Hotel 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Hotel has no effect on the direction of Military Insurance i.e., Military Insurance and Dong A go up and down completely randomly.

Pair Corralation between Military Insurance and Dong A

Assuming the 90 days trading horizon Military Insurance Corp is expected to generate 1.17 times more return on investment than Dong A. However, Military Insurance is 1.17 times more volatile than Dong A Hotel. It trades about 0.02 of its potential returns per unit of risk. Dong A Hotel is currently generating about -0.04 per unit of risk. If you would invest  1,686,214  in Military Insurance Corp on November 20, 2024 and sell it today you would earn a total of  113,786  from holding Military Insurance Corp or generate 6.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Military Insurance Corp  vs.  Dong A Hotel

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 05101520
JavaScript chart by amCharts 3.21.15MIG DAH
       Timeline  
Military Insurance Corp 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Military Insurance Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Military Insurance may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb16,50017,00017,50018,00018,50019,00019,500
Dong A Hotel 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Dong A Hotel are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Dong A displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3,1003,2003,3003,4003,5003,6003,7003,800

Military Insurance and Dong A Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.4-4.04-2.69-1.330.01.362.764.165.576.97 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15MIG DAH
       Returns  

Pair Trading with Military Insurance and Dong A

The main advantage of trading using opposite Military Insurance and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Military Insurance position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.
The idea behind Military Insurance Corp and Dong A Hotel pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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