Correlation Between Delticom and SBI Insurance

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

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

Diversification Opportunities for Delticom and SBI Insurance

-0.68

Correlation Coefficient

Delticom  SBI Insurance

Excellent diversification

The 3 months correlation between Delticom and SBI is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Delticom AG 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 Delticom 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 Delticom AG 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 Delticom i.e., Delticom and SBI Insurance go up and down completely randomly.

Pair Corralation between Delticom and SBI Insurance

Assuming the 90 days trading horizon Delticom AG is expected to under-perform the SBI Insurance. In addition to that, Delticom is 1.19 times more volatile than SBI Insurance Group. It trades about -0.08 of its total potential returns per unit of risk. SBI Insurance Group is currently generating about 0.13 per unit of volatility. If you would invest  620.00  in SBI Insurance Group on October 9, 2024 and sell it today you would earn a total of  25.00  from holding SBI Insurance Group or generate 4.03% return on investment over 90 days.

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

Delticom AG  vs.  SBI Insurance Group

Delticom AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delticom AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SBI Insurance Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Insurance Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SBI Insurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delticom and SBI Insurance

The main advantage of trading using opposite Delticom and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delticom 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 Delticom AG 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.