Correlation Between SBI Life and Quick Heal

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

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

Diversification Opportunities for SBI Life and Quick Heal

-0.5

Correlation Coefficient

SBI Life  Quick Heal

Very good diversification

The 3 months correlation between SBI and Quick is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SBI Life Insurance and Quick Heal Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quick Heal Technologies and SBI Life 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 Life Insurance are associated (or correlated) with Quick Heal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quick Heal Technologies has no effect on the direction of SBI Life i.e., SBI Life and Quick Heal go up and down completely randomly.

Pair Corralation between SBI Life and Quick Heal

Assuming the 90 days trading horizon SBI Life is expected to generate 7.36 times less return on investment than Quick Heal. But when comparing it to its historical volatility, SBI Life Insurance is 2.59 times less risky than Quick Heal. It trades about 0.04 of its potential returns per unit of risk. Quick Heal Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  15,627  in Quick Heal Technologies on October 22, 2024 and sell it today you would earn a total of  39,023  from holding Quick Heal Technologies or generate 249.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.74%
Values	Daily Returns

SBI Life Insurance  vs.  Quick Heal Technologies

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 latest weak performance, the Stock's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Quick Heal Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Quick Heal Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with SBI Life and Quick Heal

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

The idea behind SBI Life Insurance and Quick Heal Technologies 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 Transaction History module to view history of all your transactions and understand their impact on performance.