Correlation Between SANOK RUBBER and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both SANOK RUBBER and LIFENET 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 SANOK RUBBER and LIFENET INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANOK RUBBER ZY and LIFENET INSURANCE CO, you can compare the effects of market volatilities on SANOK RUBBER and LIFENET 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 SANOK RUBBER with a short position of LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and LIFENET INSURANCE.
Diversification Opportunities for SANOK RUBBER and LIFENET INSURANCE
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SANOK and LIFENET is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE and SANOK RUBBER 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 SANOK RUBBER ZY are associated (or correlated) with LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between SANOK RUBBER and LIFENET INSURANCE
Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 1.8 times more return on investment than LIFENET INSURANCE. However, SANOK RUBBER is 1.8 times more volatile than LIFENET INSURANCE CO. It trades about 0.08 of its potential returns per unit of risk. LIFENET INSURANCE CO is currently generating about -0.27 per unit of risk. If you would invest 511.00 in SANOK RUBBER ZY on November 28, 2024 and sell it today you would earn a total of 19.00 from holding SANOK RUBBER ZY or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SANOK RUBBER ZY vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| SANOK RUBBER ZY |
| LIFENET INSURANCE |
SANOK RUBBER and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANOK RUBBER and LIFENET INSURANCE
The main advantage of trading using opposite SANOK RUBBER and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER position performs unexpectedly, LIFENET 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE's long position.| SANOK RUBBER vs. MOVIE GAMES SA | SANOK RUBBER vs. CONTAGIOUS GAMING INC | SANOK RUBBER vs. Corsair Gaming | SANOK RUBBER vs. PLAYWAY SA ZY 10 |
| LIFENET INSURANCE vs. NH HOTEL GROUP | LIFENET INSURANCE vs. Guangdong Investment Limited | LIFENET INSURANCE vs. MHP Hotel AG | LIFENET INSURANCE vs. PPHE HOTEL GROUP |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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