Correlation Between Tokio Marine and Stewart Information

Can any of the company-specific risk be diversified away by investing in both Tokio Marine and Stewart Information 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 Tokio Marine and Stewart Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tokio Marine Holdings and Stewart Information Services, you can compare the effects of market volatilities on Tokio Marine and Stewart Information 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 Tokio Marine with a short position of Stewart Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokio Marine and Stewart Information.

Diversification Opportunities for Tokio Marine and Stewart Information

0.0

Correlation Coefficient

Tokio Marine  Stewart Information

Pay attention - limited upside

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

Pair Corralation between Tokio Marine and Stewart Information

If you would invest  6,740  in Stewart Information Services on December 28, 2024 and sell it today you would earn a total of  427.00  from holding Stewart Information Services or generate 6.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Tokio Marine Holdings  vs.  Stewart Information Services

Tokio Marine Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tokio Marine Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Tokio Marine is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Stewart Information

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stewart Information Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Stewart Information may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Tokio Marine and Stewart Information

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

The idea behind Tokio Marine Holdings and Stewart Information Services 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.