Correlation Between Bentre Aquaproduct and PVI Reinsurance

Can any of the company-specific risk be diversified away by investing in both Bentre Aquaproduct and PVI Reinsurance 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 Bentre Aquaproduct and PVI Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bentre Aquaproduct Import and PVI Reinsurance Corp, you can compare the effects of market volatilities on Bentre Aquaproduct and PVI Reinsurance 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 Bentre Aquaproduct with a short position of PVI Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bentre Aquaproduct and PVI Reinsurance.

Diversification Opportunities for Bentre Aquaproduct and PVI Reinsurance

0.59

Correlation Coefficient

Bentre Aquaproduct  PVI Reinsurance

Very weak diversification

The 3 months correlation between Bentre and PVI is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bentre Aquaproduct Import and PVI Reinsurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PVI Reinsurance Corp and Bentre Aquaproduct 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 Bentre Aquaproduct Import are associated (or correlated) with PVI Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PVI Reinsurance Corp has no effect on the direction of Bentre Aquaproduct i.e., Bentre Aquaproduct and PVI Reinsurance go up and down completely randomly.

Pair Corralation between Bentre Aquaproduct and PVI Reinsurance

Assuming the 90 days trading horizon Bentre Aquaproduct Import is expected to generate 0.88 times more return on investment than PVI Reinsurance. However, Bentre Aquaproduct Import is 1.13 times less risky than PVI Reinsurance. It trades about 0.19 of its potential returns per unit of risk. PVI Reinsurance Corp is currently generating about 0.08 per unit of risk. If you would invest  3,659,823  in Bentre Aquaproduct Import on December 21, 2024 and sell it today you would earn a total of  910,177  from holding Bentre Aquaproduct Import or generate 24.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.96%
Values	Daily Returns

Bentre Aquaproduct Import  vs.  PVI Reinsurance Corp

Bentre Aquaproduct Import

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bentre Aquaproduct Import are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Bentre Aquaproduct displayed solid returns over the last few months and may actually be approaching a breakup point.

PVI Reinsurance Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PVI Reinsurance Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, PVI Reinsurance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bentre Aquaproduct and PVI Reinsurance

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

The idea behind Bentre Aquaproduct Import and PVI Reinsurance 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.