Correlation Between AUTHUM INVESTMENT and General Insurance
Can any of the company-specific risk be diversified away by investing in both AUTHUM INVESTMENT and General 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 AUTHUM INVESTMENT and General Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUTHUM INVESTMENT INFRASTRUCTU and General Insurance, you can compare the effects of market volatilities on AUTHUM INVESTMENT and General 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 AUTHUM INVESTMENT with a short position of General Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUTHUM INVESTMENT and General Insurance.
Diversification Opportunities for AUTHUM INVESTMENT and General Insurance
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUTHUM and General is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AUTHUM INVESTMENT INFRASTRUCTU and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance and AUTHUM INVESTMENT 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 AUTHUM INVESTMENT INFRASTRUCTU are associated (or correlated) with General Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insurance has no effect on the direction of AUTHUM INVESTMENT i.e., AUTHUM INVESTMENT and General Insurance go up and down completely randomly.
Pair Corralation between AUTHUM INVESTMENT and General Insurance
Assuming the 90 days trading horizon AUTHUM INVESTMENT INFRASTRUCTU is expected to generate 0.93 times more return on investment than General Insurance. However, AUTHUM INVESTMENT INFRASTRUCTU is 1.07 times less risky than General Insurance. It trades about -0.07 of its potential returns per unit of risk. General Insurance is currently generating about -0.08 per unit of risk. If you would invest 193,600 in AUTHUM INVESTMENT INFRASTRUCTU on November 8, 2024 and sell it today you would lose (12,275) from holding AUTHUM INVESTMENT INFRASTRUCTU or give up 6.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUTHUM INVESTMENT INFRASTRUCTU vs. General Insurance
Performance |
| Timeline |
| AUTHUM INVESTMENT |
| General Insurance |
AUTHUM INVESTMENT and General Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUTHUM INVESTMENT and General Insurance
The main advantage of trading using opposite AUTHUM INVESTMENT and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUTHUM INVESTMENT position performs unexpectedly, General 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 General Insurance will offset losses from the drop in General Insurance's long position.| AUTHUM INVESTMENT vs. Kalyani Steels Limited | AUTHUM INVESTMENT vs. Procter Gamble Health | AUTHUM INVESTMENT vs. Som Distilleries Breweries | AUTHUM INVESTMENT vs. Electrosteel Castings Limited |
| General Insurance vs. State Bank of | General Insurance vs. Reliance Industries Limited | General Insurance vs. HDFC Bank Limited | General Insurance vs. Tata Motors Limited |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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