Correlation Between Jubilee Life and Roshan Packages

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

Diversification Opportunities for Jubilee Life and Roshan Packages

0.26

Correlation Coefficient

Jubilee Life  Roshan Packages

Modest diversification

The 3 months correlation between Jubilee and Roshan is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Life Insurance and Roshan Packages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roshan Packages 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 Roshan Packages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roshan Packages has no effect on the direction of Jubilee Life i.e., Jubilee Life and Roshan Packages go up and down completely randomly.

Pair Corralation between Jubilee Life and Roshan Packages

Assuming the 90 days trading horizon Jubilee Life Insurance is expected to generate 0.76 times more return on investment than Roshan Packages. However, Jubilee Life Insurance is 1.31 times less risky than Roshan Packages. It trades about -0.16 of its potential returns per unit of risk. Roshan Packages is currently generating about -0.17 per unit of risk. If you would invest  17,781  in Jubilee Life Insurance on December 4, 2024 and sell it today you would lose (951.00) from holding Jubilee Life Insurance or give up 5.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	85.0%
Values	Daily Returns

Jubilee Life Insurance  vs.  Roshan Packages

Jubilee Life Insurance

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jubilee Life Insurance are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, Jubilee Life is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Roshan Packages

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roshan Packages has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Jubilee Life and Roshan Packages

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

The idea behind Jubilee Life Insurance and Roshan Packages 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.