Correlation Between Sea Air and Military Insurance
Can any of the company-specific risk be diversified away by investing in both Sea Air 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 Sea Air and Military Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea Air Freight and Military Insurance Corp, you can compare the effects of market volatilities on Sea Air 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 Sea Air with a short position of Military Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea Air and Military Insurance.
Diversification Opportunities for Sea Air and Military Insurance
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sea and Military is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sea Air Freight 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 Sea Air 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 Sea Air Freight 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 Sea Air i.e., Sea Air and Military Insurance go up and down completely randomly.
Pair Corralation between Sea Air and Military Insurance
Assuming the 90 days trading horizon Sea Air is expected to generate 1.31 times less return on investment than Military Insurance. But when comparing it to its historical volatility, Sea Air Freight is 1.22 times less risky than Military Insurance. It trades about 0.03 of its potential returns per unit of risk. Military Insurance Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,485,035 in Military Insurance Corp on September 3, 2024 and sell it today you would earn a total of 324,965 from holding Military Insurance Corp or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.73% |
| Values | Daily Returns |
Sea Air Freight vs. Military Insurance Corp
Performance |
| Timeline |
| Sea Air Freight |
| Military Insurance Corp |
Sea Air and Military Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea Air and Military Insurance
The main advantage of trading using opposite Sea Air and Military Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea Air 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 Sea Air Freight 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. Sea Air Freight | Military Insurance vs. Petrolimex Information Technology | Military Insurance vs. Vincom Retail JSC | Military Insurance vs. Ha Noi Education |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |