Correlation Between Military Insurance and Tienlen Steel
Can any of the company-specific risk be diversified away by investing in both Military Insurance and Tienlen Steel 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 Tienlen Steel 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 Tienlen Steel Corp, you can compare the effects of market volatilities on Military Insurance and Tienlen Steel 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 Tienlen Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Military Insurance and Tienlen Steel.
Diversification Opportunities for Military Insurance and Tienlen Steel
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Military and Tienlen is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Military Insurance Corp and Tienlen Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tienlen Steel 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 Tienlen Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tienlen Steel Corp has no effect on the direction of Military Insurance i.e., Military Insurance and Tienlen Steel go up and down completely randomly.
Pair Corralation between Military Insurance and Tienlen Steel
Assuming the 90 days trading horizon Military Insurance Corp is expected to under-perform the Tienlen Steel. In addition to that, Military Insurance is 1.05 times more volatile than Tienlen Steel Corp. It trades about -0.29 of its total potential returns per unit of risk. Tienlen Steel Corp is currently generating about -0.24 per unit of volatility. If you would invest 462,000 in Tienlen Steel Corp on November 3, 2024 and sell it today you would lose (26,000) from holding Tienlen Steel Corp or give up 5.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Military Insurance Corp vs. Tienlen Steel Corp
Performance |
| Timeline |
| Military Insurance Corp |
| Tienlen Steel Corp |
Military Insurance and Tienlen Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Military Insurance and Tienlen Steel
The main advantage of trading using opposite Military Insurance and Tienlen Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Military Insurance position performs unexpectedly, Tienlen Steel 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 Tienlen Steel will offset losses from the drop in Tienlen Steel's long position.| Military Insurance vs. Vincom Retail JSC | Military Insurance vs. FPT Digital Retail | Military Insurance vs. PostTelecommunication Equipment | Military Insurance vs. Post and Telecommunications |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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