Correlation Between National Reinsurance and Figaro Coffee
Can any of the company-specific risk be diversified away by investing in both National Reinsurance and Figaro Coffee 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 Figaro Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Reinsurance and Figaro Coffee Group, you can compare the effects of market volatilities on National Reinsurance and Figaro Coffee 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 Figaro Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Figaro Coffee.
Diversification Opportunities for National Reinsurance and Figaro Coffee
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and Figaro is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Figaro Coffee Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figaro Coffee Group 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 Figaro Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figaro Coffee Group has no effect on the direction of National Reinsurance i.e., National Reinsurance and Figaro Coffee go up and down completely randomly.
Pair Corralation between National Reinsurance and Figaro Coffee
Assuming the 90 days trading horizon National Reinsurance is expected to generate 1.22 times less return on investment than Figaro Coffee. In addition to that, National Reinsurance is 1.35 times more volatile than Figaro Coffee Group. It trades about 0.04 of its total potential returns per unit of risk. Figaro Coffee Group is currently generating about 0.07 per unit of volatility. If you would invest 86.00 in Figaro Coffee Group on October 20, 2024 and sell it today you would earn a total of 2.00 from holding Figaro Coffee Group or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Reinsurance vs. Figaro Coffee Group
Performance |
| Timeline |
| National Reinsurance |
| Figaro Coffee Group |
National Reinsurance and Figaro Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Reinsurance and Figaro Coffee
The main advantage of trading using opposite National Reinsurance and Figaro Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Reinsurance position performs unexpectedly, Figaro Coffee 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 Figaro Coffee will offset losses from the drop in Figaro Coffee's long position.| National Reinsurance vs. Jollibee Foods Corp | National Reinsurance vs. Philex Mining Corp | National Reinsurance vs. Metropolitan Bank Trust | National Reinsurance vs. BDO Unibank |
| Figaro Coffee vs. Jollibee Foods Corp | Figaro Coffee vs. Atlas Consolidated Mining | Figaro Coffee vs. National Reinsurance | Figaro Coffee vs. Union Bank of |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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