Correlation Between Amreli Steels and Jubilee Life
Can any of the company-specific risk be diversified away by investing in both Amreli Steels and Jubilee 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 Amreli Steels and Jubilee Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amreli Steels and Jubilee Life Insurance, you can compare the effects of market volatilities on Amreli Steels and Jubilee 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 Amreli Steels with a short position of Jubilee Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amreli Steels and Jubilee Life.
Diversification Opportunities for Amreli Steels and Jubilee Life
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Amreli and Jubilee is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Amreli Steels and Jubilee Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jubilee Life Insurance and Amreli Steels 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 Amreli Steels are associated (or correlated) with Jubilee Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jubilee Life Insurance has no effect on the direction of Amreli Steels i.e., Amreli Steels and Jubilee Life go up and down completely randomly.
Pair Corralation between Amreli Steels and Jubilee Life
Assuming the 90 days trading horizon Amreli Steels is expected to generate 0.96 times more return on investment than Jubilee Life. However, Amreli Steels is 1.04 times less risky than Jubilee Life. It trades about 0.09 of its potential returns per unit of risk. Jubilee Life Insurance is currently generating about 0.05 per unit of risk. If you would invest 1,956 in Amreli Steels on August 29, 2024 and sell it today you would earn a total of 86.00 from holding Amreli Steels or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amreli Steels vs. Jubilee Life Insurance
Performance |
| Timeline |
| Amreli Steels |
| Jubilee Life Insurance |
Amreli Steels and Jubilee Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amreli Steels and Jubilee Life
The main advantage of trading using opposite Amreli Steels and Jubilee Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amreli Steels position performs unexpectedly, Jubilee 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 Jubilee Life will offset losses from the drop in Jubilee Life's long position.| Amreli Steels vs. Oil and Gas | Amreli Steels vs. Pakistan State Oil | Amreli Steels vs. Pakistan Petroleum | Amreli Steels vs. Engro |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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