Correlation Between Premier Insurance and Adamjee Insurance

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Premier Insurance and Adamjee Insurance 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 Premier Insurance and Adamjee Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Insurance and Adamjee Insurance, you can compare the effects of market volatilities on Premier Insurance and Adamjee Insurance 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 Premier Insurance with a short position of Adamjee Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Insurance and Adamjee Insurance.

Diversification Opportunities for Premier Insurance and Adamjee Insurance

PremierAdamjeeDiversified AwayPremierAdamjeeDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Premier and Adamjee is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Premier Insurance and Adamjee Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adamjee Insurance and Premier 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 Premier Insurance are associated (or correlated) with Adamjee Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adamjee Insurance has no effect on the direction of Premier Insurance i.e., Premier Insurance and Adamjee Insurance go up and down completely randomly.

Pair Corralation between Premier Insurance and Adamjee Insurance

Assuming the 90 days trading horizon Premier Insurance is expected to generate 3.93 times less return on investment than Adamjee Insurance. In addition to that, Premier Insurance is 1.37 times more volatile than Adamjee Insurance. It trades about 0.02 of its total potential returns per unit of risk. Adamjee Insurance is currently generating about 0.08 per unit of volatility. If you would invest  4,984  in Adamjee Insurance on November 25, 2024 and sell it today you would earn a total of  174.00  from holding Adamjee Insurance or generate 3.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Premier Insurance  vs.  Adamjee Insurance

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb 0102030
JavaScript chart by amCharts 3.21.15PINL AICL
       Timeline  
Premier Insurance 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Premier Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Premier Insurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb55.25.45.65.866.26.46.6
Adamjee Insurance 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Adamjee Insurance are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Adamjee Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb40455055

Premier Insurance and Adamjee Insurance Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-9.68-7.25-4.82-2.390.02.364.87.249.6812.12 0.0200.0250.0300.0350.040
JavaScript chart by amCharts 3.21.15PINL AICL
       Returns  

Pair Trading with Premier Insurance and Adamjee Insurance

The main advantage of trading using opposite Premier Insurance and Adamjee Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Insurance position performs unexpectedly, Adamjee Insurance 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 Adamjee Insurance will offset losses from the drop in Adamjee Insurance's long position.
The idea behind Premier Insurance and Adamjee Insurance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Complementary Tools

Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Global Correlations
Find global opportunities by holding instruments from different markets
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments