Correlation Between Crescent Steel and Jubilee Life

Can any of the company-specific risk be diversified away by investing in both Crescent Steel and Jubilee Life 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 Crescent Steel and Jubilee Life into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crescent Steel Allied and Jubilee Life Insurance, you can compare the effects of market volatilities on Crescent Steel and Jubilee Life 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 Crescent Steel with a short position of Jubilee Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Steel and Jubilee Life.

Diversification Opportunities for Crescent Steel and Jubilee Life

-0.22

Correlation Coefficient

Crescent Steel  Jubilee Life

Very good diversification

The 3 months correlation between Crescent and Jubilee is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Steel Allied and Jubilee Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jubilee Life Insurance and Crescent Steel 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 Crescent Steel Allied are associated (or correlated) with Jubilee Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jubilee Life Insurance has no effect on the direction of Crescent Steel i.e., Crescent Steel and Jubilee Life go up and down completely randomly.

Pair Corralation between Crescent Steel and Jubilee Life

Assuming the 90 days trading horizon Crescent Steel Allied is expected to generate 0.72 times more return on investment than Jubilee Life. However, Crescent Steel Allied is 1.39 times less risky than Jubilee Life. It trades about -0.08 of its potential returns per unit of risk. Jubilee Life Insurance is currently generating about -0.29 per unit of risk. If you would invest  10,983  in Crescent Steel Allied on December 5, 2024 and sell it today you would lose (356.00) from holding Crescent Steel Allied or give up 3.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Crescent Steel Allied  vs.  Jubilee Life Insurance

Crescent Steel Allied

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Crescent Steel Allied are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Crescent Steel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Jubilee Life Insurance

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jubilee Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Crescent Steel and Jubilee Life

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

The idea behind Crescent Steel Allied and Jubilee Life 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 Global Correlations module to find global opportunities by holding instruments from different markets.