Correlation Between SBI Insurance and Blue Sky

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

Diversification Opportunities for SBI Insurance and Blue Sky

0.2

Correlation Coefficient

SBI Insurance  Blue Sky

Modest diversification

The 3 months correlation between SBI and Blue is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and Blue Sky Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sky Uranium 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 Blue Sky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sky Uranium has no effect on the direction of SBI Insurance i.e., SBI Insurance and Blue Sky go up and down completely randomly.

Pair Corralation between SBI Insurance and Blue Sky

If you would invest  630.00  in SBI Insurance Group on December 2, 2024 and sell it today you would earn a total of  90.00  from holding SBI Insurance Group or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

SBI Insurance Group  vs.  Blue Sky Uranium

SBI Insurance Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Insurance Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SBI Insurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Blue Sky Uranium

Risk-Adjusted Performance

Good

Over the last 90 days Blue Sky Uranium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak essential indicators, Blue Sky reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SBI Insurance and Blue Sky

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

The idea behind SBI Insurance Group and Blue Sky Uranium 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.