Correlation Between Iargento and Libra Insurance

Can any of the company-specific risk be diversified away by investing in both Iargento and Libra 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 Iargento and Libra Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Iargento Hi Tech and Libra Insurance, you can compare the effects of market volatilities on Iargento and Libra 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 Iargento with a short position of Libra Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iargento and Libra Insurance.

Diversification Opportunities for Iargento and Libra Insurance

-0.17

Correlation Coefficient

Iargento  Libra Insurance

Good diversification

The 3 months correlation between Iargento and Libra is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Iargento Hi Tech and Libra Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libra Insurance and Iargento 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 Iargento Hi Tech are associated (or correlated) with Libra Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libra Insurance has no effect on the direction of Iargento i.e., Iargento and Libra Insurance go up and down completely randomly.

Pair Corralation between Iargento and Libra Insurance

Assuming the 90 days trading horizon Iargento Hi Tech is expected to generate 33.08 times more return on investment than Libra Insurance. However, Iargento is 33.08 times more volatile than Libra Insurance. It trades about 0.07 of its potential returns per unit of risk. Libra Insurance is currently generating about 0.12 per unit of risk. If you would invest  22,710  in Iargento Hi Tech on October 11, 2024 and sell it today you would lose (12,630) from holding Iargento Hi Tech or give up 55.61% of portfolio value over 90 days.

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

Iargento Hi Tech  vs.  Libra Insurance

Iargento Hi Tech

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Iargento Hi Tech are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Iargento sustained solid returns over the last few months and may actually be approaching a breakup point.

Libra Insurance

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Libra Insurance are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Libra Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iargento and Libra Insurance

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

The idea behind Iargento Hi Tech and Libra 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.