Correlation Between AIICO INSURANCE and NOTORE CHEMICAL

Can any of the company-specific risk be diversified away by investing in both AIICO INSURANCE and NOTORE CHEMICAL 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 AIICO INSURANCE and NOTORE CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AIICO INSURANCE PLC and NOTORE CHEMICAL IND, you can compare the effects of market volatilities on AIICO INSURANCE and NOTORE CHEMICAL 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 AIICO INSURANCE with a short position of NOTORE CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIICO INSURANCE and NOTORE CHEMICAL.

Diversification Opportunities for AIICO INSURANCE and NOTORE CHEMICAL

0.0

Correlation Coefficient

AIICO INSURANCE  NOTORE CHEMICAL

Pay attention - limited upside

The 3 months correlation between AIICO and NOTORE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AIICO INSURANCE PLC and NOTORE CHEMICAL IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOTORE CHEMICAL IND and AIICO 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 AIICO INSURANCE PLC are associated (or correlated) with NOTORE CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOTORE CHEMICAL IND has no effect on the direction of AIICO INSURANCE i.e., AIICO INSURANCE and NOTORE CHEMICAL go up and down completely randomly.

Pair Corralation between AIICO INSURANCE and NOTORE CHEMICAL

If you would invest  124.00  in AIICO INSURANCE PLC on October 26, 2024 and sell it today you would earn a total of  55.00  from holding AIICO INSURANCE PLC or generate 44.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AIICO INSURANCE PLC  vs.  NOTORE CHEMICAL IND

AIICO INSURANCE PLC

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AIICO INSURANCE PLC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental indicators, AIICO INSURANCE showed solid returns over the last few months and may actually be approaching a breakup point.

NOTORE CHEMICAL IND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOTORE CHEMICAL IND has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NOTORE CHEMICAL is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AIICO INSURANCE and NOTORE CHEMICAL

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

The idea behind AIICO INSURANCE PLC and NOTORE CHEMICAL IND 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.