Correlation Between Quice Food and Jubilee Life

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

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

Diversification Opportunities for Quice Food and Jubilee Life

-0.21

Correlation Coefficient

Quice Food  Jubilee Life

Very good diversification

The 3 months correlation between Quice and Jubilee is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Quice Food Industries and Jubilee Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jubilee Life Insurance and Quice Food 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 Quice Food Industries are associated (or correlated) with Jubilee Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jubilee Life Insurance has no effect on the direction of Quice Food i.e., Quice Food and Jubilee Life go up and down completely randomly.

Pair Corralation between Quice Food and Jubilee Life

Assuming the 90 days trading horizon Quice Food is expected to generate 2.11 times less return on investment than Jubilee Life. In addition to that, Quice Food is 1.25 times more volatile than Jubilee Life Insurance. It trades about 0.01 of its total potential returns per unit of risk. Jubilee Life Insurance is currently generating about 0.03 per unit of volatility. If you would invest  16,398  in Jubilee Life Insurance on December 4, 2024 and sell it today you would earn a total of  432.00  from holding Jubilee Life Insurance or generate 2.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Quice Food Industries  vs.  Jubilee Life Insurance

Quice Food Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quice Food Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Quice Food is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Quice Food and Jubilee Life

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

The idea behind Quice Food Industries and Jubilee 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.