Correlation Between AIICO INSURANCE and CONSOLIDATED HALLMARK

Can any of the company-specific risk be diversified away by investing in both AIICO INSURANCE and CONSOLIDATED HALLMARK 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 CONSOLIDATED HALLMARK 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 CONSOLIDATED HALLMARK INSURANCE, you can compare the effects of market volatilities on AIICO INSURANCE and CONSOLIDATED HALLMARK 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 CONSOLIDATED HALLMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIICO INSURANCE and CONSOLIDATED HALLMARK.

Diversification Opportunities for AIICO INSURANCE and CONSOLIDATED HALLMARK

0.61

Correlation Coefficient

AIICO INSURANCE  CONSOLIDATED HALLMARK

Poor diversification

The 3 months correlation between AIICO and CONSOLIDATED is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding AIICO INSURANCE PLC and CONSOLIDATED HALLMARK INSURANC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONSOLIDATED HALLMARK 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 CONSOLIDATED HALLMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONSOLIDATED HALLMARK has no effect on the direction of AIICO INSURANCE i.e., AIICO INSURANCE and CONSOLIDATED HALLMARK go up and down completely randomly.

Pair Corralation between AIICO INSURANCE and CONSOLIDATED HALLMARK

Assuming the 90 days trading horizon AIICO INSURANCE PLC is expected to generate 0.91 times more return on investment than CONSOLIDATED HALLMARK. However, AIICO INSURANCE PLC is 1.1 times less risky than CONSOLIDATED HALLMARK. It trades about 0.17 of its potential returns per unit of risk. CONSOLIDATED HALLMARK INSURANCE is currently generating about 0.05 per unit of risk. If you would invest  166.00  in AIICO INSURANCE PLC on April 29, 2025 and sell it today you would earn a total of  56.00  from holding AIICO INSURANCE PLC or generate 33.73% return on investment over 90 days.

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

AIICO INSURANCE PLC  vs.  CONSOLIDATED HALLMARK INSURANC

AIICO INSURANCE PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AIICO INSURANCE PLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, AIICO INSURANCE showed solid returns over the last few months and may actually be approaching a breakup point.

CONSOLIDATED HALLMARK

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED HALLMARK INSURANCE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, CONSOLIDATED HALLMARK may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with AIICO INSURANCE and CONSOLIDATED HALLMARK

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

The idea behind AIICO INSURANCE PLC and CONSOLIDATED HALLMARK 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.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.