Correlation Between Jubilee Life and Atlas Insurance

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

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

Diversification Opportunities for Jubilee Life and Atlas Insurance

0.88

Correlation Coefficient

Jubilee Life  Atlas Insurance

Very poor diversification

The 3 months correlation between Jubilee and Atlas is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Atlas Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Insurance and Jubilee 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 Jubilee Life Insurance are associated (or correlated) with Atlas Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Insurance has no effect on the direction of Jubilee Life i.e., Jubilee Life and Atlas Insurance go up and down completely randomly.

Pair Corralation between Jubilee Life and Atlas Insurance

Assuming the 90 days trading horizon Jubilee Life is expected to generate 1.11 times less return on investment than Atlas Insurance. In addition to that, Jubilee Life is 1.4 times more volatile than Atlas Insurance. It trades about 0.24 of its total potential returns per unit of risk. Atlas Insurance is currently generating about 0.37 per unit of volatility. If you would invest  3,897  in Atlas Insurance on September 14, 2024 and sell it today you would earn a total of  2,203  from holding Atlas Insurance or generate 56.53% return on investment over 90 days.

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

Jubilee Life Insurance  vs.  Atlas Insurance

Jubilee Life Insurance

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jubilee Life Insurance are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Jubilee Life disclosed solid returns over the last few months and may actually be approaching a breakup point.

Atlas Insurance

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Atlas Insurance are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Atlas Insurance sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jubilee Life and Atlas Insurance

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

The idea behind Jubilee Life Insurance and Atlas 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.