Correlation Between Life Insurance and DJ Mediaprint

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

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

Diversification Opportunities for Life Insurance and DJ Mediaprint

-0.1

Correlation Coefficient

Life Insurance  DJ Mediaprint

Good diversification

The 3 months correlation between Life and DJML is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Life Insurance and DJ Mediaprint Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DJ Mediaprint Logistics and Life 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 Life Insurance are associated (or correlated) with DJ Mediaprint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DJ Mediaprint Logistics has no effect on the direction of Life Insurance i.e., Life Insurance and DJ Mediaprint go up and down completely randomly.

Pair Corralation between Life Insurance and DJ Mediaprint

Assuming the 90 days trading horizon Life Insurance is expected to generate 0.65 times more return on investment than DJ Mediaprint. However, Life Insurance is 1.54 times less risky than DJ Mediaprint. It trades about -0.21 of its potential returns per unit of risk. DJ Mediaprint Logistics is currently generating about -0.27 per unit of risk. If you would invest  90,480  in Life Insurance on October 24, 2024 and sell it today you would lose (6,725) from holding Life Insurance or give up 7.43% of portfolio value over 90 days.

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

Life Insurance  vs.  DJ Mediaprint Logistics

Life Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

DJ Mediaprint Logistics

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DJ Mediaprint Logistics are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, DJ Mediaprint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Life Insurance and DJ Mediaprint

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

The idea behind Life Insurance and DJ Mediaprint Logistics 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.