Correlation Between Military Insurance and 577 Investment
Can any of the company-specific risk be diversified away by investing in both Military Insurance and 577 Investment 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 577 Investment 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 577 Investment Corp, you can compare the effects of market volatilities on Military Insurance and 577 Investment 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 577 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Military Insurance and 577 Investment.
Diversification Opportunities for Military Insurance and 577 Investment
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Military and 577 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Military Insurance Corp and 577 Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 577 Investment Corp 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 577 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 577 Investment Corp has no effect on the direction of Military Insurance i.e., Military Insurance and 577 Investment go up and down completely randomly.
Pair Corralation between Military Insurance and 577 Investment
Assuming the 90 days trading horizon Military Insurance Corp is expected to generate 1.12 times more return on investment than 577 Investment. However, Military Insurance is 1.12 times more volatile than 577 Investment Corp. It trades about 0.28 of its potential returns per unit of risk. 577 Investment Corp is currently generating about -0.03 per unit of risk. If you would invest 1,670,000 in Military Insurance Corp on September 4, 2024 and sell it today you would earn a total of 190,000 from holding Military Insurance Corp or generate 11.38% 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. 577 Investment Corp
Performance |
| Timeline |
| Military Insurance Corp |
| 577 Investment Corp |
Military Insurance and 577 Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Military Insurance and 577 Investment
The main advantage of trading using opposite Military Insurance and 577 Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Military Insurance position performs unexpectedly, 577 Investment 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 577 Investment will offset losses from the drop in 577 Investment's long position.| Military Insurance vs. Nafoods Group JSC | Military Insurance vs. Century Synthetic Fiber | Military Insurance vs. Post and Telecommunications | Military Insurance vs. Telecoms Informatics JSC |
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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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