Correlation Between Military Insurance and Mobile World
Can any of the company-specific risk be diversified away by investing in both Military Insurance and Mobile World 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 Mobile World 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 Mobile World Investment, you can compare the effects of market volatilities on Military Insurance and Mobile World 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 Mobile World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Military Insurance and Mobile World.
Diversification Opportunities for Military Insurance and Mobile World
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Military and Mobile is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Military Insurance Corp and Mobile World Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile World 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 Mobile World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile World Investment has no effect on the direction of Military Insurance i.e., Military Insurance and Mobile World go up and down completely randomly.
Pair Corralation between Military Insurance and Mobile World
Assuming the 90 days trading horizon Military Insurance Corp is expected to generate 0.6 times more return on investment than Mobile World. However, Military Insurance Corp is 1.66 times less risky than Mobile World. It trades about -0.01 of its potential returns per unit of risk. Mobile World Investment is currently generating about -0.26 per unit of risk. If you would invest 1,695,000 in Military Insurance Corp on August 30, 2024 and sell it today you would lose (5,000) from holding Military Insurance Corp or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Military Insurance Corp vs. Mobile World Investment
Performance |
| Timeline |
| Military Insurance Corp |
| Mobile World Investment |
Military Insurance and Mobile World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Military Insurance and Mobile World
The main advantage of trading using opposite Military Insurance and Mobile World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Military Insurance position performs unexpectedly, Mobile World 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 Mobile World will offset losses from the drop in Mobile World's long position.| Military Insurance vs. Petrolimex Insurance Corp | Military Insurance vs. Hanoi Beer Alcohol | Military Insurance vs. Elcom Technology Communications | Military Insurance vs. IDJ FINANCIAL |
| Mobile World vs. FIT INVEST JSC | Mobile World vs. Damsan JSC | Mobile World vs. An Phat Plastic | Mobile World vs. APG Securities Joint |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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