Correlation Between ALFORMER Industrial and Union Insurance
Can any of the company-specific risk be diversified away by investing in both ALFORMER Industrial and Union 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 ALFORMER Industrial and Union Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALFORMER Industrial Co and Union Insurance Co, you can compare the effects of market volatilities on ALFORMER Industrial and Union 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 ALFORMER Industrial with a short position of Union Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALFORMER Industrial and Union Insurance.
Diversification Opportunities for ALFORMER Industrial and Union Insurance
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ALFORMER and Union is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ALFORMER Industrial Co and Union Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Insurance and ALFORMER Industrial 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 ALFORMER Industrial Co are associated (or correlated) with Union Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Insurance has no effect on the direction of ALFORMER Industrial i.e., ALFORMER Industrial and Union Insurance go up and down completely randomly.
Pair Corralation between ALFORMER Industrial and Union Insurance
Assuming the 90 days trading horizon ALFORMER Industrial Co is expected to generate 4.67 times more return on investment than Union Insurance. However, ALFORMER Industrial is 4.67 times more volatile than Union Insurance Co. It trades about 0.03 of its potential returns per unit of risk. Union Insurance Co is currently generating about -0.05 per unit of risk. If you would invest 3,045 in ALFORMER Industrial Co on October 20, 2024 and sell it today you would earn a total of 65.00 from holding ALFORMER Industrial Co or generate 2.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ALFORMER Industrial Co vs. Union Insurance Co
Performance |
Timeline |
ALFORMER Industrial |
Union Insurance |
ALFORMER Industrial and Union Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ALFORMER Industrial and Union Insurance
The main advantage of trading using opposite ALFORMER Industrial and Union Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALFORMER Industrial position performs unexpectedly, Union 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 Union Insurance will offset losses from the drop in Union Insurance's long position.ALFORMER Industrial vs. China Airlines | ALFORMER Industrial vs. Song Ho Industrial | ALFORMER Industrial vs. Shih Kuen Plastics | ALFORMER Industrial vs. De Licacy Industrial |
Union Insurance vs. Shinkong Insurance Co | Union Insurance vs. Central Reinsurance Corp | Union Insurance vs. Taiwan Fire Marine | Union Insurance vs. Taichung Commercial Bank |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Content Syndication Quickly integrate customizable finance content to your own investment portal |