Correlation Between SBI Insurance and Insurance Australia
Can any of the company-specific risk be diversified away by investing in both SBI Insurance and Insurance Australia 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 Insurance Australia 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 Insurance Australia Group, you can compare the effects of market volatilities on SBI Insurance and Insurance Australia 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 Insurance Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and Insurance Australia.
Diversification Opportunities for SBI Insurance and Insurance Australia
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBI and Insurance is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and Insurance Australia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insurance Australia 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 Insurance Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insurance Australia has no effect on the direction of SBI Insurance i.e., SBI Insurance and Insurance Australia go up and down completely randomly.
Pair Corralation between SBI Insurance and Insurance Australia
Assuming the 90 days trading horizon SBI Insurance Group is expected to generate 0.65 times more return on investment than Insurance Australia. However, SBI Insurance Group is 1.54 times less risky than Insurance Australia. It trades about 0.12 of its potential returns per unit of risk. Insurance Australia Group is currently generating about -0.06 per unit of risk. If you would invest 627.00 in SBI Insurance Group on December 30, 2024 and sell it today you would earn a total of 73.00 from holding SBI Insurance Group or generate 11.64% 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. Insurance Australia Group
Performance |
Timeline |
SBI Insurance Group |
Insurance Australia |
SBI Insurance and Insurance Australia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SBI Insurance and Insurance Australia
The main advantage of trading using opposite SBI Insurance and Insurance Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance position performs unexpectedly, Insurance Australia 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 Insurance Australia will offset losses from the drop in Insurance Australia's long position.SBI Insurance vs. Highlight Communications AG | SBI Insurance vs. Entravision Communications | SBI Insurance vs. SBA Communications Corp | SBI Insurance vs. The Yokohama Rubber |
Insurance Australia vs. Ross Stores | Insurance Australia vs. MARKET VECTR RETAIL | Insurance Australia vs. MCEWEN MINING INC | Insurance Australia vs. ANGLO ASIAN MINING |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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