Correlation Between SBI Insurance and Mapletree Industrial

Can any of the company-specific risk be diversified away by investing in both SBI Insurance and Mapletree Industrial 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 Mapletree Industrial 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 Mapletree Industrial Trust, you can compare the effects of market volatilities on SBI Insurance and Mapletree Industrial 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 Mapletree Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and Mapletree Industrial.

Diversification Opportunities for SBI Insurance and Mapletree Industrial

-0.51

Correlation Coefficient

SBI Insurance  Mapletree Industrial

Excellent diversification

The 3 months correlation between SBI and Mapletree is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and Mapletree Industrial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapletree Industrial 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 Mapletree Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapletree Industrial has no effect on the direction of SBI Insurance i.e., SBI Insurance and Mapletree Industrial go up and down completely randomly.

Pair Corralation between SBI Insurance and Mapletree Industrial

Assuming the 90 days trading horizon SBI Insurance Group is expected to generate 1.26 times more return on investment than Mapletree Industrial. However, SBI Insurance is 1.26 times more volatile than Mapletree Industrial Trust. It trades about 0.11 of its potential returns per unit of risk. Mapletree Industrial Trust is currently generating about -0.13 per unit of risk. If you would invest  565.00  in SBI Insurance Group on September 16, 2024 and sell it today you would earn a total of  60.00  from holding SBI Insurance Group or generate 10.62% return on investment over 90 days.

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

SBI Insurance Group  vs.  Mapletree Industrial Trust

SBI Insurance Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Insurance Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SBI Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mapletree Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mapletree Industrial Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SBI Insurance and Mapletree Industrial

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

The idea behind SBI Insurance Group and Mapletree Industrial Trust 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.