Correlation Between SBI Insurance and Nucor

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

Diversification Opportunities for SBI Insurance and Nucor

0.58

Correlation Coefficient

SBI Insurance  Nucor

Very weak diversification

The 3 months correlation between SBI and Nucor is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and Nucor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucor 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 Nucor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucor has no effect on the direction of SBI Insurance i.e., SBI Insurance and Nucor go up and down completely randomly.

Pair Corralation between SBI Insurance and Nucor

Assuming the 90 days trading horizon SBI Insurance Group is expected to generate 0.6 times more return on investment than Nucor. However, SBI Insurance Group is 1.67 times less risky than Nucor. It trades about 0.14 of its potential returns per unit of risk. Nucor is currently generating about 0.06 per unit of risk. If you would invest  610.00  in SBI Insurance Group on December 20, 2024 and sell it today you would earn a total of  80.00  from holding SBI Insurance Group or generate 13.11% return on investment over 90 days.

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

SBI Insurance Group  vs.  Nucor

SBI Insurance Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Insurance Group are ranked lower than 10 (%) 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.

Nucor

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nucor are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Nucor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with SBI Insurance and Nucor

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

The idea behind SBI Insurance Group and Nucor 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.