Correlation Between National Reinsurance and Asia United
Can any of the company-specific risk be diversified away by investing in both National Reinsurance and Asia United 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 National Reinsurance and Asia United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Reinsurance and Asia United Bank, you can compare the effects of market volatilities on National Reinsurance and Asia United 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 National Reinsurance with a short position of Asia United. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Asia United.
Diversification Opportunities for National Reinsurance and Asia United
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Asia is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Asia United Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia United Bank and National Reinsurance 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 National Reinsurance are associated (or correlated) with Asia United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia United Bank has no effect on the direction of National Reinsurance i.e., National Reinsurance and Asia United go up and down completely randomly.
Pair Corralation between National Reinsurance and Asia United
Assuming the 90 days trading horizon National Reinsurance is expected to under-perform the Asia United. In addition to that, National Reinsurance is 3.3 times more volatile than Asia United Bank. It trades about -0.05 of its total potential returns per unit of risk. Asia United Bank is currently generating about 0.11 per unit of volatility. If you would invest 5,805 in Asia United Bank on September 13, 2024 and sell it today you would earn a total of 445.00 from holding Asia United Bank or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
National Reinsurance vs. Asia United Bank
Performance |
| Timeline |
| National Reinsurance |
| Asia United Bank |
National Reinsurance and Asia United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Reinsurance and Asia United
The main advantage of trading using opposite National Reinsurance and Asia United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Reinsurance position performs unexpectedly, Asia United 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 Asia United will offset losses from the drop in Asia United's long position.| National Reinsurance vs. Atlas Consolidated Mining | National Reinsurance vs. House of Investments | National Reinsurance vs. Philippine Savings Bank | National Reinsurance vs. Premiere Entertainment |
| Asia United vs. National Reinsurance | Asia United vs. Prime Media Holdings | Asia United vs. Crown Asia Chemicals | Asia United vs. Pacificonline Systems |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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