Correlation Between National Reinsurance and Concepcion Industrial
Can any of the company-specific risk be diversified away by investing in both National Reinsurance and Concepcion Industrial 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 Concepcion Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Reinsurance and Concepcion Industrial Corp, you can compare the effects of market volatilities on National Reinsurance and Concepcion Industrial 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 Concepcion Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Concepcion Industrial.
Diversification Opportunities for National Reinsurance and Concepcion Industrial
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Concepcion is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Concepcion Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concepcion Industrial 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 Concepcion Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concepcion Industrial has no effect on the direction of National Reinsurance i.e., National Reinsurance and Concepcion Industrial go up and down completely randomly.
Pair Corralation between National Reinsurance and Concepcion Industrial
Assuming the 90 days trading horizon National Reinsurance is expected to under-perform the Concepcion Industrial. In addition to that, National Reinsurance is 2.58 times more volatile than Concepcion Industrial Corp. It trades about -0.04 of its total potential returns per unit of risk. Concepcion Industrial Corp is currently generating about 0.08 per unit of volatility. If you would invest 1,338 in Concepcion Industrial Corp on October 25, 2024 and sell it today you would earn a total of 20.00 from holding Concepcion Industrial Corp or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.24% |
| Values | Daily Returns |
National Reinsurance vs. Concepcion Industrial Corp
Performance |
| Timeline |
| National Reinsurance |
| Concepcion Industrial |
National Reinsurance and Concepcion Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Reinsurance and Concepcion Industrial
The main advantage of trading using opposite National Reinsurance and Concepcion Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Reinsurance position performs unexpectedly, Concepcion Industrial 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 Concepcion Industrial will offset losses from the drop in Concepcion Industrial's long position.| National Reinsurance vs. Philippine Business Bank | National Reinsurance vs. Bank of the | National Reinsurance vs. BDO Unibank | National Reinsurance vs. Century Pacific Food |
| Concepcion Industrial vs. Jollibee Foods Corp | Concepcion Industrial vs. National Reinsurance | Concepcion Industrial vs. Transpacific Broadband Group | Concepcion Industrial vs. Lepanto Consolidated Mining |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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