Correlation Between National Reinsurance and Easycall Communications

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

By analyzing existing cross correlation between National Reinsurance and Easycall Communications Philippines, you can compare the effects of market volatilities on National Reinsurance and Easycall Communications 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 National Reinsurance with a short position of Easycall Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Reinsurance and Easycall Communications.

Diversification Opportunities for National Reinsurance and Easycall Communications

-0.77

Correlation Coefficient

National Reinsurance  Easycall Communications

Pay attention - limited upside

The 3 months correlation between National and Easycall is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding National Reinsurance and Easycall Communications Philip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easycall Communications and National Reinsurance 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 National Reinsurance are associated (or correlated) with Easycall Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easycall Communications has no effect on the direction of National Reinsurance i.e., National Reinsurance and Easycall Communications go up and down completely randomly.

Pair Corralation between National Reinsurance and Easycall Communications

Assuming the 90 days trading horizon National Reinsurance is expected to under-perform the Easycall Communications. But the stock apears to be less risky and, when comparing its historical volatility, National Reinsurance is 2.75 times less risky than Easycall Communications. The stock trades about -0.01 of its potential returns per unit of risk. The Easycall Communications Philippines is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  197.00  in Easycall Communications Philippines on September 20, 2024 and sell it today you would earn a total of  63.00  from holding Easycall Communications Philippines or generate 31.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	59.02%
Values	Daily Returns

National Reinsurance  vs.  Easycall Communications Philip

National Reinsurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Reinsurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, National Reinsurance is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Easycall Communications

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Easycall Communications Philippines are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Easycall Communications exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Reinsurance and Easycall Communications

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

The idea behind National Reinsurance and Easycall Communications Philippines 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.