Correlation Between SBI Insurance and Dno ASA
Can any of the company-specific risk be diversified away by investing in both SBI Insurance and Dno ASA 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 SBI Insurance and Dno ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Insurance Group and Dno ASA, you can compare the effects of market volatilities on SBI Insurance and Dno ASA 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 SBI Insurance with a short position of Dno ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and Dno ASA.
Diversification Opportunities for SBI Insurance and Dno ASA
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SBI and Dno is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and Dno ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dno ASA and SBI 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 SBI Insurance Group are associated (or correlated) with Dno ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dno ASA has no effect on the direction of SBI Insurance i.e., SBI Insurance and Dno ASA go up and down completely randomly.
Pair Corralation between SBI Insurance and Dno ASA
Assuming the 90 days trading horizon SBI Insurance Group is expected to generate 0.87 times more return on investment than Dno ASA. However, SBI Insurance Group is 1.15 times less risky than Dno ASA. It trades about 0.14 of its potential returns per unit of risk. Dno ASA is currently generating about -0.06 per unit of risk. If you would invest 625.00 in SBI Insurance Group on December 2, 2024 and sell it today you would earn a total of 95.00 from holding SBI Insurance Group or generate 15.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SBI Insurance Group vs. Dno ASA
Performance |
Timeline |
SBI Insurance Group |
Dno ASA |
SBI Insurance and Dno ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SBI Insurance and Dno ASA
The main advantage of trading using opposite SBI Insurance and Dno ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance position performs unexpectedly, Dno ASA 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 Dno ASA will offset losses from the drop in Dno ASA's long position.SBI Insurance vs. Sabre Insurance Group | SBI Insurance vs. UNIQA INSURANCE GR | SBI Insurance vs. AviChina Industry Technology | SBI Insurance vs. SMA Solar Technology |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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