Correlation Between Medplus Health and SBI Life

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

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

Diversification Opportunities for Medplus Health and SBI Life

-0.87

Correlation Coefficient

Medplus Health  SBI Life

Pay attention - limited upside

The 3 months correlation between Medplus and SBI is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Medplus Health Services 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 Medplus Health 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 Medplus Health Services 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 Medplus Health i.e., Medplus Health and SBI Life go up and down completely randomly.

Pair Corralation between Medplus Health and SBI Life

Assuming the 90 days trading horizon Medplus Health Services is expected to under-perform the SBI Life. In addition to that, Medplus Health is 1.13 times more volatile than SBI Life Insurance. It trades about -0.14 of its total potential returns per unit of risk. SBI Life Insurance is currently generating about 0.05 per unit of volatility. If you would invest  143,185  in SBI Life Insurance on October 6, 2024 and sell it today you would earn a total of  1,585  from holding SBI Life Insurance or generate 1.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Medplus Health Services  vs.  SBI Life Insurance

Medplus Health Services

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Medplus Health Services are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady essential indicators, Medplus Health unveiled 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 uncertain 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 Medplus Health and SBI Life

The main advantage of trading using opposite Medplus Health and SBI Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medplus Health 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 Medplus Health Services 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.