Correlation Between Military Insurance and Telecoms Informatics
Can any of the company-specific risk be diversified away by investing in both Military Insurance and Telecoms Informatics 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 Telecoms Informatics 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 Telecoms Informatics JSC, you can compare the effects of market volatilities on Military Insurance and Telecoms Informatics 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 Telecoms Informatics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Military Insurance and Telecoms Informatics.
Diversification Opportunities for Military Insurance and Telecoms Informatics
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Military and Telecoms is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Military Insurance Corp and Telecoms Informatics JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecoms Informatics JSC 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 Telecoms Informatics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecoms Informatics JSC has no effect on the direction of Military Insurance i.e., Military Insurance and Telecoms Informatics go up and down completely randomly.
Pair Corralation between Military Insurance and Telecoms Informatics
Assuming the 90 days trading horizon Military Insurance Corp is expected to generate 1.89 times more return on investment than Telecoms Informatics. However, Military Insurance is 1.89 times more volatile than Telecoms Informatics JSC. It trades about 0.31 of its potential returns per unit of risk. Telecoms Informatics JSC is currently generating about -0.07 per unit of risk. If you would invest 1,705,000 in Military Insurance Corp on November 28, 2024 and sell it today you would earn a total of 150,000 from holding Military Insurance Corp or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Military Insurance Corp vs. Telecoms Informatics JSC
Performance |
| Timeline |
| Military Insurance Corp |
| Telecoms Informatics JSC |
Military Insurance and Telecoms Informatics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Military Insurance and Telecoms Informatics
The main advantage of trading using opposite Military Insurance and Telecoms Informatics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Military Insurance position performs unexpectedly, Telecoms Informatics 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 Telecoms Informatics will offset losses from the drop in Telecoms Informatics' long position.| Military Insurance vs. Foreign Trade Development | Military Insurance vs. Saigon Telecommunication Technologies | Military Insurance vs. PC3 Investment JSC | Military Insurance vs. Binh Duong Trade |
| Telecoms Informatics vs. Viettel Construction JSC | Telecoms Informatics vs. Cotec Construction JSC | Telecoms Informatics vs. Song Hong Construction | Telecoms Informatics vs. Da Nang Construction |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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