Correlation Between Victoria Insurance and Ashmore Asset

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

By analyzing existing cross correlation between Victoria Insurance Tbk and Ashmore Asset Management, you can compare the effects of market volatilities on Victoria Insurance and Ashmore Asset 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 Victoria Insurance with a short position of Ashmore Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victoria Insurance and Ashmore Asset.

Diversification Opportunities for Victoria Insurance and Ashmore Asset

0.52

Correlation Coefficient

Victoria Insurance  Ashmore Asset

Very weak diversification

The 3 months correlation between Victoria and Ashmore is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Victoria Insurance Tbk and Ashmore Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Asset Management and Victoria 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 Victoria Insurance Tbk are associated (or correlated) with Ashmore Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Asset Management has no effect on the direction of Victoria Insurance i.e., Victoria Insurance and Ashmore Asset go up and down completely randomly.

Pair Corralation between Victoria Insurance and Ashmore Asset

Assuming the 90 days trading horizon Victoria Insurance Tbk is expected to generate 0.48 times more return on investment than Ashmore Asset. However, Victoria Insurance Tbk is 2.07 times less risky than Ashmore Asset. It trades about -0.03 of its potential returns per unit of risk. Ashmore Asset Management is currently generating about -0.33 per unit of risk. If you would invest  10,300  in Victoria Insurance Tbk on December 4, 2024 and sell it today you would lose (100.00) from holding Victoria Insurance Tbk or give up 0.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Victoria Insurance Tbk  vs.  Ashmore Asset Management

Victoria Insurance Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victoria Insurance Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Ashmore Asset Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ashmore Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Victoria Insurance and Ashmore Asset

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

The idea behind Victoria Insurance Tbk and Ashmore Asset Management 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.