Correlation Between Post and Military Insurance
Can any of the company-specific risk be diversified away by investing in both Post and Military 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 Post and Military Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Post and Telecommunications and Military Insurance Corp, you can compare the effects of market volatilities on Post and Military 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 Post with a short position of Military Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Post and Military Insurance.
Diversification Opportunities for Post and Military Insurance
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Post and Military is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Post and Telecommunications and Military Insurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Military Insurance Corp and Post 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 Post and Telecommunications are associated (or correlated) with Military Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Military Insurance Corp has no effect on the direction of Post i.e., Post and Military Insurance go up and down completely randomly.
Pair Corralation between Post and Military Insurance
Assuming the 90 days trading horizon Post is expected to generate 115.93 times less return on investment than Military Insurance. In addition to that, Post is 1.47 times more volatile than Military Insurance Corp. It trades about 0.0 of its total potential returns per unit of risk. Military Insurance Corp is currently generating about 0.18 per unit of volatility. If you would invest 1,695,000 in Military Insurance Corp on September 2, 2024 and sell it today you would earn a total of 115,000 from holding Military Insurance Corp or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Post and Telecommunications vs. Military Insurance Corp
Performance |
| Timeline |
| Post and Telecommuni |
| Military Insurance Corp |
Post and Military Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Post and Military Insurance
The main advantage of trading using opposite Post and Military Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Post position performs unexpectedly, Military 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 Military Insurance will offset losses from the drop in Military Insurance's long position.The idea behind Post and Telecommunications and Military Insurance Corp 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.| Military Insurance vs. FIT INVEST JSC | Military Insurance vs. Damsan JSC | Military Insurance vs. An Phat Plastic | Military Insurance vs. Alphanam ME |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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