Correlation Between LIFENET INSURANCE and Imperial Metals
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE and Imperial Metals 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 Imperial Metals 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 Imperial Metals, you can compare the effects of market volatilities on LIFENET INSURANCE and Imperial Metals 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 Imperial Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Imperial Metals.
Diversification Opportunities for LIFENET INSURANCE and Imperial Metals
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LIFENET and Imperial is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Imperial Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Metals 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 Imperial Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Metals has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and Imperial Metals go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Imperial Metals
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to generate 0.65 times more return on investment than Imperial Metals. However, LIFENET INSURANCE CO is 1.55 times less risky than Imperial Metals. It trades about 0.03 of its potential returns per unit of risk. Imperial Metals is currently generating about -0.01 per unit of risk. If you would invest 1,120 in LIFENET INSURANCE CO on October 22, 2024 and sell it today you would earn a total of 10.00 from holding LIFENET INSURANCE CO or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Imperial Metals
Performance |
| Timeline |
| LIFENET INSURANCE |
| Imperial Metals |
LIFENET INSURANCE and Imperial Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Imperial Metals
The main advantage of trading using opposite LIFENET INSURANCE and Imperial Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE position performs unexpectedly, Imperial Metals 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 Imperial Metals will offset losses from the drop in Imperial Metals' long position.| LIFENET INSURANCE vs. Chongqing Machinery Electric | LIFENET INSURANCE vs. FORMPIPE SOFTWARE AB | LIFENET INSURANCE vs. GBS Software AG | LIFENET INSURANCE vs. Dairy Farm International |
| Imperial Metals vs. Nippon Steel | Imperial Metals vs. LIFENET INSURANCE CO | Imperial Metals vs. BlueScope Steel Limited | Imperial Metals vs. MOUNT GIBSON IRON |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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