Correlation Between CNL Capital and Interlife General

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Can any of the company-specific risk be diversified away by investing in both CNL Capital and Interlife General 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 CNL Capital and Interlife General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNL Capital EKES AIFM and Interlife General Insurance, you can compare the effects of market volatilities on CNL Capital and Interlife General 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 CNL Capital with a short position of Interlife General. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNL Capital and Interlife General.

Diversification Opportunities for CNL Capital and Interlife General

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between CNL and Interlife is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CNL Capital EKES AIFM and Interlife General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interlife General and CNL 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 CNL Capital EKES AIFM are associated (or correlated) with Interlife General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interlife General has no effect on the direction of CNL Capital i.e., CNL Capital and Interlife General go up and down completely randomly.

Pair Corralation between CNL Capital and Interlife General

Assuming the 90 days trading horizon CNL Capital EKES AIFM is expected to generate 1.0 times more return on investment than Interlife General. However, CNL Capital is 1.0 times more volatile than Interlife General Insurance. It trades about 0.1 of its potential returns per unit of risk. Interlife General Insurance is currently generating about -0.2 per unit of risk. If you would invest  695.00  in CNL Capital EKES AIFM on September 1, 2024 and sell it today you would earn a total of  50.00  from holding CNL Capital EKES AIFM or generate 7.19% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.46%
ValuesDaily Returns

CNL Capital EKES AIFM  vs.  Interlife General Insurance

 Performance 
       Timeline  
CNL Capital EKES 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in CNL Capital EKES AIFM are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain essential indicators, CNL Capital may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Interlife General 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Interlife General Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

CNL Capital and Interlife General Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CNL Capital and Interlife General

The main advantage of trading using opposite CNL Capital and Interlife General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNL Capital position performs unexpectedly, Interlife General 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 Interlife General will offset losses from the drop in Interlife General's long position.
The idea behind CNL Capital EKES AIFM and Interlife General 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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