Correlation Between LIFENET INSURANCE and Popular
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE and Popular 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 Popular 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 Popular, you can compare the effects of market volatilities on LIFENET INSURANCE and Popular 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 Popular. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Popular.
Diversification Opportunities for LIFENET INSURANCE and Popular
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between LIFENET and Popular is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Popular in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Popular 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 Popular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Popular has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and Popular go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Popular
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to under-perform the Popular. In addition to that, LIFENET INSURANCE is 1.96 times more volatile than Popular. It trades about -0.11 of its total potential returns per unit of risk. Popular is currently generating about 0.06 per unit of volatility. If you would invest 9,181 in Popular on September 15, 2024 and sell it today you would earn a total of 119.00 from holding Popular or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Popular
Performance |
| Timeline |
| LIFENET INSURANCE |
| Popular |
LIFENET INSURANCE and Popular Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Popular
The main advantage of trading using opposite LIFENET INSURANCE and Popular positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE position performs unexpectedly, Popular 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 Popular will offset losses from the drop in Popular's long position.| LIFENET INSURANCE vs. Xtrackers LevDAX | LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX |
| Popular vs. LIFENET INSURANCE CO | Popular vs. Selective Insurance Group | Popular vs. Universal Insurance Holdings | Popular vs. Ping An Insurance |
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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