Correlation Between DEAP CAPITAL and AIICO INSURANCE

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

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

Diversification Opportunities for DEAP CAPITAL and AIICO INSURANCE

0.29

Correlation Coefficient

DEAP CAPITAL  AIICO INSURANCE

Modest diversification

The 3 months correlation between DEAP and AIICO is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding DEAP CAPITAL MANAGEMENT and AIICO INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIICO INSURANCE PLC and DEAP CAPITAL 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 DEAP CAPITAL MANAGEMENT are associated (or correlated) with AIICO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIICO INSURANCE PLC has no effect on the direction of DEAP CAPITAL i.e., DEAP CAPITAL and AIICO INSURANCE go up and down completely randomly.

Pair Corralation between DEAP CAPITAL and AIICO INSURANCE

Assuming the 90 days trading horizon DEAP CAPITAL MANAGEMENT is expected to under-perform the AIICO INSURANCE. In addition to that, DEAP CAPITAL is 2.52 times more volatile than AIICO INSURANCE PLC. It trades about -0.04 of its total potential returns per unit of risk. AIICO INSURANCE PLC is currently generating about 0.01 per unit of volatility. If you would invest  159.00  in AIICO INSURANCE PLC on March 26, 2025 and sell it today you would earn a total of  0.00  from holding AIICO INSURANCE PLC or generate 0.0% return on investment over 90 days.

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

DEAP CAPITAL MANAGEMENT  vs.  AIICO INSURANCE PLC

DEAP CAPITAL MANAGEMENT

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DEAP CAPITAL MANAGEMENT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, DEAP CAPITAL may actually be approaching a critical reversion point that can send shares even higher in July 2025.

AIICO INSURANCE PLC

Risk-Adjusted Performance

Very Weak

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

Pair Trading with DEAP CAPITAL and AIICO INSURANCE

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

The idea behind DEAP CAPITAL MANAGEMENT and AIICO INSURANCE PLC 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.