Correlation Between Libra Insurance and Scope Metals
Can any of the company-specific risk be diversified away by investing in both Libra Insurance and Scope Metals 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 Libra Insurance and Scope Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Libra Insurance and Scope Metals Group, you can compare the effects of market volatilities on Libra Insurance and Scope Metals 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 Libra Insurance with a short position of Scope Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libra Insurance and Scope Metals.
Diversification Opportunities for Libra Insurance and Scope Metals
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Libra and Scope is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Libra Insurance and Scope Metals Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scope Metals Group and Libra Insurance 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 Libra Insurance are associated (or correlated) with Scope Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scope Metals Group has no effect on the direction of Libra Insurance i.e., Libra Insurance and Scope Metals go up and down completely randomly.
Pair Corralation between Libra Insurance and Scope Metals
Assuming the 90 days trading horizon Libra Insurance is expected to generate 1.34 times more return on investment than Scope Metals. However, Libra Insurance is 1.34 times more volatile than Scope Metals Group. It trades about 0.29 of its potential returns per unit of risk. Scope Metals Group is currently generating about 0.19 per unit of risk. If you would invest 53,268 in Libra Insurance on December 4, 2024 and sell it today you would earn a total of 55,432 from holding Libra Insurance or generate 104.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Libra Insurance vs. Scope Metals Group
Performance |
Timeline |
Libra Insurance |
Scope Metals Group |
Libra Insurance and Scope Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Libra Insurance and Scope Metals
The main advantage of trading using opposite Libra Insurance and Scope Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libra Insurance position performs unexpectedly, Scope Metals 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 Scope Metals will offset losses from the drop in Scope Metals' long position.Libra Insurance vs. Amanet Management Systems | Libra Insurance vs. MediPress Health Limited Partnership | Libra Insurance vs. WhiteSmoke Software | Libra Insurance vs. Computer Direct |
Scope Metals vs. Delek Automotive Systems | Scope Metals vs. Kerur Holdings | Scope Metals vs. Neto ME Holdings | Scope Metals vs. Bank Leumi Le Israel |
Check out your portfolio center.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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