Correlation Between Future Retail and Life Insurance

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Can any of the company-specific risk be diversified away by investing in both Future Retail and Life Insurance 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 Future Retail and Life Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Future Retail Limited and Life Insurance, you can compare the effects of market volatilities on Future Retail and Life Insurance 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 Future Retail with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Future Retail and Life Insurance.

Diversification Opportunities for Future Retail and Life Insurance

FutureLifeDiversified AwayFutureLifeDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Future and Life is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Future Retail Limited and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and Future Retail 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 Future Retail Limited are associated (or correlated) with Life Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Insurance has no effect on the direction of Future Retail i.e., Future Retail and Life Insurance go up and down completely randomly.

Pair Corralation between Future Retail and Life Insurance

If you would invest  228.00  in Future Retail Limited on September 18, 2024 and sell it today you would earn a total of  0.00  from holding Future Retail Limited or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Future Retail Limited  vs.  Life Insurance

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -15-10-50
JavaScript chart by amCharts 3.21.15FRETAIL LICI
       Timeline  
Future Retail Limited 

Risk-Adjusted Performance

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Strong
Very Weak
Over the last 90 days Future Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Future Retail is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2.32.352.4
Life Insurance 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec9009501,0001,050

Future Retail and Life Insurance Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.050.100.15
JavaScript chart by amCharts 3.21.15FRETAIL LICI
       Returns  

Pair Trading with Future Retail and Life Insurance

The main advantage of trading using opposite Future Retail and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Future Retail position performs unexpectedly, Life Insurance 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 Life Insurance will offset losses from the drop in Life Insurance's long position.
The idea behind Future Retail Limited and Life Insurance 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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