Correlation Between Atlas Insurance and IBL HealthCare
Can any of the company-specific risk be diversified away by investing in both Atlas Insurance and IBL HealthCare 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 Atlas Insurance and IBL HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas Insurance and IBL HealthCare, you can compare the effects of market volatilities on Atlas Insurance and IBL HealthCare 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 Atlas Insurance with a short position of IBL HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas Insurance and IBL HealthCare.
Diversification Opportunities for Atlas Insurance and IBL HealthCare
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Atlas and IBL is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Atlas Insurance and IBL HealthCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBL HealthCare and Atlas 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 Atlas Insurance are associated (or correlated) with IBL HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBL HealthCare has no effect on the direction of Atlas Insurance i.e., Atlas Insurance and IBL HealthCare go up and down completely randomly.
Pair Corralation between Atlas Insurance and IBL HealthCare
Assuming the 90 days trading horizon Atlas Insurance is expected to generate 0.39 times more return on investment than IBL HealthCare. However, Atlas Insurance is 2.58 times less risky than IBL HealthCare. It trades about -0.09 of its potential returns per unit of risk. IBL HealthCare is currently generating about -0.04 per unit of risk. If you would invest 5,854 in Atlas Insurance on October 11, 2024 and sell it today you would lose (209.00) from holding Atlas Insurance or give up 3.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Atlas Insurance vs. IBL HealthCare
Performance |
Timeline |
Atlas Insurance |
IBL HealthCare |
Atlas Insurance and IBL HealthCare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Atlas Insurance and IBL HealthCare
The main advantage of trading using opposite Atlas Insurance and IBL HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas Insurance position performs unexpectedly, IBL HealthCare 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 IBL HealthCare will offset losses from the drop in IBL HealthCare's long position.Atlas Insurance vs. Adamjee Insurance | Atlas Insurance vs. Jubilee Life Insurance | Atlas Insurance vs. Nimir Industrial Chemical | Atlas Insurance vs. MCB Investment Manag |
IBL HealthCare vs. Atlas Insurance | IBL HealthCare vs. WorldCall Telecom | IBL HealthCare vs. Avanceon | IBL HealthCare vs. Bank of Punjab |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance |