Correlation Between SBI Cards and Life Insurance

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SBI Cards and Life Insurance 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 SBI Cards and Life Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Cards and and Life Insurance, you can compare the effects of market volatilities on SBI Cards and Life Insurance 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 SBI Cards with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Cards and Life Insurance.

Diversification Opportunities for SBI Cards and Life Insurance

SBILifeDiversified AwaySBILifeDiversified Away100%
-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between SBI and Life is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SBI Cards and and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and SBI Cards 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 SBI Cards and are associated (or correlated) with Life Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Insurance has no effect on the direction of SBI Cards i.e., SBI Cards and Life Insurance go up and down completely randomly.

Pair Corralation between SBI Cards and Life Insurance

Assuming the 90 days trading horizon SBI Cards and is expected to generate 0.91 times more return on investment than Life Insurance. However, SBI Cards and is 1.1 times less risky than Life Insurance. It trades about 0.15 of its potential returns per unit of risk. Life Insurance is currently generating about -0.1 per unit of risk. If you would invest  66,755  in SBI Cards and on October 27, 2024 and sell it today you would earn a total of  9,075  from holding SBI Cards and or generate 13.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.41%
ValuesDaily Returns

SBI Cards and  vs.  Life Insurance

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -10-505
JavaScript chart by amCharts 3.21.15SBICARD LICI
       Timeline  
SBI Cards 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in SBI Cards and are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, SBI Cards exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan680700720740760
Life Insurance 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 conflicting 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan8509009501,000

SBI Cards and Life Insurance Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.74-3.55-2.36-1.17-0.01981.22.433.674.916.14 0.050.100.15
JavaScript chart by amCharts 3.21.15SBICARD LICI
       Returns  

Pair Trading with SBI Cards and Life Insurance

The main advantage of trading using opposite SBI Cards and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Cards position performs unexpectedly, Life Insurance 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 Life Insurance will offset losses from the drop in Life Insurance's long position.
The idea behind SBI Cards and and 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

Other Complementary Tools

Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets