Correlation Between Verena Multi and Victoria Insurance
Can any of the company-specific risk be diversified away by investing in both Verena Multi and Victoria 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 Verena Multi and Victoria Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Verena Multi Finance and Victoria Insurance Tbk, you can compare the effects of market volatilities on Verena Multi and Victoria 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 Verena Multi with a short position of Victoria Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verena Multi and Victoria Insurance.
Diversification Opportunities for Verena Multi and Victoria Insurance
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Verena and Victoria is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Verena Multi Finance and Victoria Insurance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victoria Insurance Tbk and Verena Multi 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 Verena Multi Finance are associated (or correlated) with Victoria Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victoria Insurance Tbk has no effect on the direction of Verena Multi i.e., Verena Multi and Victoria Insurance go up and down completely randomly.
Pair Corralation between Verena Multi and Victoria Insurance
Assuming the 90 days trading horizon Verena Multi Finance is expected to generate 1.32 times more return on investment than Victoria Insurance. However, Verena Multi is 1.32 times more volatile than Victoria Insurance Tbk. It trades about -0.05 of its potential returns per unit of risk. Victoria Insurance Tbk is currently generating about -0.18 per unit of risk. If you would invest 9,000 in Verena Multi Finance on August 30, 2024 and sell it today you would lose (200.00) from holding Verena Multi Finance or give up 2.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Verena Multi Finance vs. Victoria Insurance Tbk
Performance |
| Timeline |
| Verena Multi Finance |
| Victoria Insurance Tbk |
Verena Multi and Victoria Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verena Multi and Victoria Insurance
The main advantage of trading using opposite Verena Multi and Victoria Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verena Multi position performs unexpectedly, Victoria 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 Victoria Insurance will offset losses from the drop in Victoria Insurance's long position.| Verena Multi vs. Bank Cimb Niaga | Verena Multi vs. Indosat Tbk | Verena Multi vs. Astra Agro Lestari | Verena Multi vs. Bank Mandiri Persero |
| Victoria Insurance vs. Bank Cimb Niaga | Victoria Insurance vs. Indosat Tbk | Victoria Insurance vs. Astra Agro Lestari | Victoria Insurance vs. Bank Mandiri Persero |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |