Correlation Between TPL Insurance and East West
Can any of the company-specific risk be diversified away by investing in both TPL Insurance and East West 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 TPL Insurance and East West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TPL Insurance and East West Insurance, you can compare the effects of market volatilities on TPL Insurance and East West 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 TPL Insurance with a short position of East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of TPL Insurance and East West.
Diversification Opportunities for TPL Insurance and East West
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TPL and East is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding TPL Insurance and East West Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East West Insurance and TPL 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 TPL Insurance are associated (or correlated) with East West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East West Insurance has no effect on the direction of TPL Insurance i.e., TPL Insurance and East West go up and down completely randomly.
Pair Corralation between TPL Insurance and East West
If you would invest 5,729 in East West Insurance on November 18, 2024 and sell it today you would earn a total of 0.00 from holding East West Insurance or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 30.0% |
| Values | Daily Returns |
TPL Insurance vs. East West Insurance
Performance |
| Timeline |
| TPL Insurance |
| East West Insurance |
Risk-Adjusted Performance
Solid
Weak | Strong |
TPL Insurance and East West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TPL Insurance and East West
The main advantage of trading using opposite TPL Insurance and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TPL Insurance position performs unexpectedly, East West 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 East West will offset losses from the drop in East West's long position.| TPL Insurance vs. Synthetic Products Enterprises | TPL Insurance vs. Atlas Insurance | TPL Insurance vs. IGI Life Insurance | TPL Insurance vs. Nimir Industrial Chemical |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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