Correlation Between LASSONDE INDUSTINC and SBI Insurance

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

By analyzing existing cross correlation between LASSONDE INDUSTINC A and SBI Insurance Group, you can compare the effects of market volatilities on LASSONDE INDUSTINC and SBI 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 LASSONDE INDUSTINC with a short position of SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of LASSONDE INDUSTINC and SBI Insurance.

Diversification Opportunities for LASSONDE INDUSTINC and SBI Insurance

0.13

Correlation Coefficient

LASSONDE INDUSTINC  SBI Insurance

Average diversification

The 3 months correlation between LASSONDE and SBI is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding LASSONDE INDUSTINC A and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group and LASSONDE INDUSTINC 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 LASSONDE INDUSTINC A are associated (or correlated) with SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of LASSONDE INDUSTINC i.e., LASSONDE INDUSTINC and SBI Insurance go up and down completely randomly.

Pair Corralation between LASSONDE INDUSTINC and SBI Insurance

Assuming the 90 days horizon LASSONDE INDUSTINC A is expected to generate 1.55 times more return on investment than SBI Insurance. However, LASSONDE INDUSTINC is 1.55 times more volatile than SBI Insurance Group. It trades about 0.09 of its potential returns per unit of risk. SBI Insurance Group is currently generating about 0.12 per unit of risk. If you would invest  11,532  in LASSONDE INDUSTINC A on December 29, 2024 and sell it today you would earn a total of  1,368  from holding LASSONDE INDUSTINC A or generate 11.86% return on investment over 90 days.

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

LASSONDE INDUSTINC A  vs.  SBI Insurance Group

LASSONDE INDUSTINC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LASSONDE INDUSTINC A are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, LASSONDE INDUSTINC reported solid returns over the last few months and may actually be approaching a breakup point.

SBI Insurance Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Insurance Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SBI Insurance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with LASSONDE INDUSTINC and SBI Insurance

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

The idea behind LASSONDE INDUSTINC A and SBI Insurance Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.