Correlation Between Tait Marketing and First Insurance

Can any of the company-specific risk be diversified away by investing in both Tait Marketing and First 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 Tait Marketing and First Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tait Marketing Distribution and First Insurance Co, you can compare the effects of market volatilities on Tait Marketing and First 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 Tait Marketing with a short position of First Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tait Marketing and First Insurance.

Diversification Opportunities for Tait Marketing and First Insurance

0.57

Correlation Coefficient

Tait Marketing  First Insurance

Very weak diversification

The 3 months correlation between Tait and First is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Tait Marketing Distribution and First Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Insurance and Tait Marketing 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 Tait Marketing Distribution are associated (or correlated) with First Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Insurance has no effect on the direction of Tait Marketing i.e., Tait Marketing and First Insurance go up and down completely randomly.

Pair Corralation between Tait Marketing and First Insurance

Assuming the 90 days trading horizon Tait Marketing Distribution is expected to generate 0.91 times more return on investment than First Insurance. However, Tait Marketing Distribution is 1.1 times less risky than First Insurance. It trades about 0.1 of its potential returns per unit of risk. First Insurance Co is currently generating about -0.07 per unit of risk. If you would invest  3,930  in Tait Marketing Distribution on September 24, 2024 and sell it today you would earn a total of  70.00  from holding Tait Marketing Distribution or generate 1.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Tait Marketing Distribution  vs.  First Insurance Co

Tait Marketing Distr

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tait Marketing Distribution are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Tait Marketing is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

First Insurance

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Insurance Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, First Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tait Marketing and First Insurance

The main advantage of trading using opposite Tait Marketing and First Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tait Marketing position performs unexpectedly, First 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 First Insurance will offset losses from the drop in First Insurance's long position.

The idea behind Tait Marketing Distribution and First Insurance Co 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.