Correlation Between AGI Greenpac and HDFC Life

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Can any of the company-specific risk be diversified away by investing in both AGI Greenpac and HDFC Life 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 AGI Greenpac and HDFC Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGI Greenpac Limited and HDFC Life Insurance, you can compare the effects of market volatilities on AGI Greenpac and HDFC Life 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 AGI Greenpac with a short position of HDFC Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGI Greenpac and HDFC Life.

Diversification Opportunities for AGI Greenpac and HDFC Life

-0.8
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between AGI and HDFC is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding AGI Greenpac Limited and HDFC Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HDFC Life Insurance and AGI Greenpac 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 AGI Greenpac Limited are associated (or correlated) with HDFC Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HDFC Life Insurance has no effect on the direction of AGI Greenpac i.e., AGI Greenpac and HDFC Life go up and down completely randomly.

Pair Corralation between AGI Greenpac and HDFC Life

Assuming the 90 days trading horizon AGI Greenpac Limited is expected to under-perform the HDFC Life. In addition to that, AGI Greenpac is 4.28 times more volatile than HDFC Life Insurance. It trades about -0.24 of its total potential returns per unit of risk. HDFC Life Insurance is currently generating about -0.33 per unit of volatility. If you would invest  64,180  in HDFC Life Insurance on October 9, 2024 and sell it today you would lose (3,585) from holding HDFC Life Insurance or give up 5.59% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy95.0%
ValuesDaily Returns

AGI Greenpac Limited  vs.  HDFC Life Insurance

 Performance 
       Timeline  
AGI Greenpac Limited 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in AGI Greenpac Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, AGI Greenpac may actually be approaching a critical reversion point that can send shares even higher in February 2025.
HDFC Life Insurance 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HDFC Life Insurance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AGI Greenpac and HDFC Life Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AGI Greenpac and HDFC Life

The main advantage of trading using opposite AGI Greenpac and HDFC Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGI Greenpac position performs unexpectedly, HDFC Life 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 HDFC Life will offset losses from the drop in HDFC Life's long position.
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The idea behind AGI Greenpac Limited and HDFC Life Insurance 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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