Correlation Between Krebs Biochemicals and SBI Life

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

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

Diversification Opportunities for Krebs Biochemicals and SBI Life

-0.76

Correlation Coefficient

Krebs Biochemicals  SBI Life

Pay attention - limited upside

The 3 months correlation between Krebs and SBI is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Krebs Biochemicals and and SBI Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Life Insurance and Krebs Biochemicals 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 Krebs Biochemicals and are associated (or correlated) with SBI Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Life Insurance has no effect on the direction of Krebs Biochemicals i.e., Krebs Biochemicals and SBI Life go up and down completely randomly.

Pair Corralation between Krebs Biochemicals and SBI Life

Assuming the 90 days trading horizon Krebs Biochemicals and is expected to generate 2.48 times more return on investment than SBI Life. However, Krebs Biochemicals is 2.48 times more volatile than SBI Life Insurance. It trades about 0.01 of its potential returns per unit of risk. SBI Life Insurance is currently generating about 0.03 per unit of risk. If you would invest  10,560  in Krebs Biochemicals and on October 11, 2024 and sell it today you would lose (1,035) from holding Krebs Biochemicals and or give up 9.8% of portfolio value over 90 days.

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

Krebs Biochemicals and  vs.  SBI Life Insurance

Krebs Biochemicals and

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Krebs Biochemicals and are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental drivers, Krebs Biochemicals demonstrated solid returns over the last few months and may actually be approaching a breakup point.

SBI Life Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SBI Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Krebs Biochemicals and SBI Life

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

The idea behind Krebs Biochemicals and and SBI 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.