Correlation Between City Union and Life Insurance
Can any of the company-specific risk be diversified away by investing in both City Union and Life 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 City Union and Life Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City Union Bank and Life Insurance, you can compare the effects of market volatilities on City Union and Life 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 City Union with a short position of Life Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Union and Life Insurance.
Diversification Opportunities for City Union and Life Insurance
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between City and Life is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding City Union Bank and Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Insurance and City Union 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 City Union Bank are associated (or correlated) with Life Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Insurance has no effect on the direction of City Union i.e., City Union and Life Insurance go up and down completely randomly.
Pair Corralation between City Union and Life Insurance
Assuming the 90 days trading horizon City Union Bank is expected to generate 1.1 times more return on investment than Life Insurance. However, City Union is 1.1 times more volatile than Life Insurance. It trades about 0.02 of its potential returns per unit of risk. Life Insurance is currently generating about -0.19 per unit of risk. If you would invest 17,233 in City Union Bank on November 1, 2024 and sell it today you would earn a total of 64.00 from holding City Union Bank or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
City Union Bank vs. Life Insurance
Performance |
| Timeline |
| City Union Bank |
| Life Insurance |
City Union and Life Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Union and Life Insurance
The main advantage of trading using opposite City Union and Life Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Union position performs unexpectedly, Life 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 Life Insurance will offset losses from the drop in Life Insurance's long position.| City Union vs. Uniinfo Telecom Services | City Union vs. Bharat Road Network | City Union vs. Total Transport Systems | City Union vs. Rainbow Childrens Medicare |
| Life Insurance vs. Vardhman Special Steels | Life Insurance vs. NMDC Steel Limited | Life Insurance vs. SAL Steel Limited | Life Insurance vs. Kotak Mahindra Bank |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |