Correlation Between IGI Life and Data Agro

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

Diversification Opportunities for IGI Life and Data Agro

IGIDataDiversified AwayIGIDataDiversified Away100%
0.58
  Correlation Coefficient

Very weak diversification

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

Pair Corralation between IGI Life and Data Agro

Assuming the 90 days trading horizon IGI Life is expected to generate 14.29 times less return on investment than Data Agro. But when comparing it to its historical volatility, IGI Life Insurance is 1.53 times less risky than Data Agro. It trades about 0.01 of its potential returns per unit of risk. Data Agro is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  8,732  in Data Agro on October 26, 2024 and sell it today you would earn a total of  3,468  from holding Data Agro or generate 39.72% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy93.55%
ValuesDaily Returns

IGI Life Insurance  vs.  Data Agro

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 020406080
JavaScript chart by amCharts 3.21.15IGIL DAAG
       Timeline  
IGI Life Insurance 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in IGI Life Insurance are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, IGI Life is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1313.51414.51515.51616.517
Data Agro 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Data Agro are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Data Agro sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan8090100110120130140150

IGI Life and Data Agro Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.15-7.6-5.05-2.50.04332.555.157.7410.34 0.0150.0200.0250.0300.035
JavaScript chart by amCharts 3.21.15IGIL DAAG
       Returns  

Pair Trading with IGI Life and Data Agro

The main advantage of trading using opposite IGI Life and Data Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGI Life position performs unexpectedly, Data Agro 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 Data Agro will offset losses from the drop in Data Agro's long position.
The idea behind IGI Life Insurance and Data Agro 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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