Correlation Between Adamjee Insurance and East West

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Adamjee 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 Adamjee 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 Adamjee Insurance and East West Insurance, you can compare the effects of market volatilities on Adamjee 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 Adamjee Insurance with a short position of East West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adamjee Insurance and East West.

Diversification Opportunities for Adamjee Insurance and East West

AdamjeeEastDiversified AwayAdamjeeEastDiversified Away100%
0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Adamjee and East is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Adamjee 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 Adamjee 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 Adamjee 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 Adamjee Insurance i.e., Adamjee Insurance and East West go up and down completely randomly.

Pair Corralation between Adamjee Insurance and East West

Assuming the 90 days trading horizon Adamjee Insurance is expected to generate 1.59 times less return on investment than East West. But when comparing it to its historical volatility, Adamjee Insurance is 1.14 times less risky than East West. It trades about 0.2 of its potential returns per unit of risk. East West Insurance is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  3,771  in East West Insurance on October 20, 2024 and sell it today you would earn a total of  1,958  from holding East West Insurance or generate 51.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy65.08%
ValuesDaily Returns

Adamjee Insurance  vs.  East West Insurance

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 0204060
JavaScript chart by amCharts 3.21.15AICL EWIC
       Timeline  
Adamjee Insurance 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Adamjee Insurance are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Adamjee Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan40455055
East West Insurance 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Solid
Over the last 90 days East West Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, East West sustained solid returns over the last few months and may actually be approaching a breakup point.

Adamjee Insurance and East West Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.32-7.73-5.14-2.550.04322.835.78.5711.45 0.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15AICL EWIC
       Returns  

Pair Trading with Adamjee Insurance and East West

The main advantage of trading using opposite Adamjee Insurance and East West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adamjee 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.
The idea behind Adamjee Insurance and East West Insurance 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.
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges