Correlation Between SBI Insurance and Metro AG
Can any of the company-specific risk be diversified away by investing in both SBI Insurance and Metro AG 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 SBI Insurance and Metro AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Insurance Group and Metro AG, you can compare the effects of market volatilities on SBI Insurance and Metro AG 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 SBI Insurance with a short position of Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and Metro AG.
Diversification Opportunities for SBI Insurance and Metro AG
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBI and Metro is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG and SBI 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 SBI Insurance Group are associated (or correlated) with Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of SBI Insurance i.e., SBI Insurance and Metro AG go up and down completely randomly.
Pair Corralation between SBI Insurance and Metro AG
Assuming the 90 days trading horizon SBI Insurance Group is expected to generate 0.94 times more return on investment than Metro AG. However, SBI Insurance Group is 1.07 times less risky than Metro AG. It trades about -0.01 of its potential returns per unit of risk. Metro AG is currently generating about -0.07 per unit of risk. If you would invest 700.00 in SBI Insurance Group on September 26, 2024 and sell it today you would lose (95.00) from holding SBI Insurance Group or give up 13.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Insurance Group vs. Metro AG
Performance |
| Timeline |
| SBI Insurance Group |
| Metro AG |
SBI Insurance and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and Metro AG
The main advantage of trading using opposite SBI Insurance and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance position performs unexpectedly, Metro AG 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 Metro AG will offset losses from the drop in Metro AG's long position.| SBI Insurance vs. Perseus Mining Limited | SBI Insurance vs. GREENX METALS LTD | SBI Insurance vs. Algonquin Power Utilities | SBI Insurance vs. SALESFORCE INC CDR |
| Metro AG vs. SBI Insurance Group | Metro AG vs. BE Semiconductor Industries | Metro AG vs. Monster Beverage Corp | Metro AG vs. Direct Line 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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