Correlation Between National Reinsurance and Monde Nissin
Can any of the company-specific risk be diversified away by investing in both National Reinsurance and Monde Nissin 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 Monde Nissin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Reinsurance and Monde Nissin Corp, you can compare the effects of market volatilities on National Reinsurance and Monde Nissin 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 Monde Nissin. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Monde Nissin.
Diversification Opportunities for National Reinsurance and Monde Nissin
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between National and Monde is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Monde Nissin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monde Nissin Corp 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 Monde Nissin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monde Nissin Corp has no effect on the direction of National Reinsurance i.e., National Reinsurance and Monde Nissin go up and down completely randomly.
Pair Corralation between National Reinsurance and Monde Nissin
Assuming the 90 days trading horizon National Reinsurance is expected to generate 3.28 times more return on investment than Monde Nissin. However, National Reinsurance is 3.28 times more volatile than Monde Nissin Corp. It trades about 0.08 of its potential returns per unit of risk. Monde Nissin Corp is currently generating about 0.0 per unit of risk. If you would invest 38.00 in National Reinsurance on August 25, 2024 and sell it today you would earn a total of 21.00 from holding National Reinsurance or generate 55.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 78.26% |
| Values | Daily Returns |
National Reinsurance vs. Monde Nissin Corp
Performance |
| Timeline |
| National Reinsurance |
| Monde Nissin Corp |
National Reinsurance and Monde Nissin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Reinsurance and Monde Nissin
The main advantage of trading using opposite National Reinsurance and Monde Nissin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Reinsurance position performs unexpectedly, Monde Nissin 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 Monde Nissin will offset losses from the drop in Monde Nissin's long position.| National Reinsurance vs. Manulife Financial Corp | National Reinsurance vs. Allhome Corp | National Reinsurance vs. Jollibee Foods Corp | National Reinsurance vs. LFM Properties Corp |
| Monde Nissin vs. Converge Information Communications | Monde Nissin vs. Top Frontier Investment | Monde Nissin vs. Philippine Business Bank | Monde Nissin vs. Globe Telecom |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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