Correlation Between LIFENET INSURANCE and Computer
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE and Computer 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 LIFENET INSURANCE and Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Computer And Technologies, you can compare the effects of market volatilities on LIFENET INSURANCE and Computer 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 LIFENET INSURANCE with a short position of Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Computer.
Diversification Opportunities for LIFENET INSURANCE and Computer
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LIFENET and Computer is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Computer And Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer And Technologies and LIFENET INSURANCE 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 LIFENET INSURANCE CO are associated (or correlated) with Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer And Technologies has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and Computer go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Computer
Assuming the 90 days horizon LIFENET INSURANCE is expected to generate 2.77 times less return on investment than Computer. But when comparing it to its historical volatility, LIFENET INSURANCE CO is 1.44 times less risky than Computer. It trades about 0.03 of its potential returns per unit of risk. Computer And Technologies is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8.19 in Computer And Technologies on October 12, 2024 and sell it today you would earn a total of 8.81 from holding Computer And Technologies or generate 107.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Computer And Technologies
Performance |
| Timeline |
| LIFENET INSURANCE |
| Computer And Technologies |
LIFENET INSURANCE and Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Computer
The main advantage of trading using opposite LIFENET INSURANCE and Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE position performs unexpectedly, Computer 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 Computer will offset losses from the drop in Computer's long position.| LIFENET INSURANCE vs. Xtrackers ShortDAX | LIFENET INSURANCE vs. Xtrackers LevDAX | LIFENET INSURANCE vs. Lyxor 1 |
| Computer vs. SCANSOURCE | Computer vs. Casio Computer CoLtd | Computer vs. Hemisphere Energy Corp | Computer vs. Liberty Broadband |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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