Correlation Between SBI Insurance and Continental Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both SBI Insurance and Continental Aktiengesellscha 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 Continental Aktiengesellscha 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 Continental Aktiengesellschaft, you can compare the effects of market volatilities on SBI Insurance and Continental Aktiengesellscha 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 Continental Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and Continental Aktiengesellscha.
Diversification Opportunities for SBI Insurance and Continental Aktiengesellscha
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SBI and Continental is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group and Continental Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Aktiengesellscha 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 Continental Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Aktiengesellscha has no effect on the direction of SBI Insurance i.e., SBI Insurance and Continental Aktiengesellscha go up and down completely randomly.
Pair Corralation between SBI Insurance and Continental Aktiengesellscha
Assuming the 90 days trading horizon SBI Insurance is expected to generate 2.06 times less return on investment than Continental Aktiengesellscha. But when comparing it to its historical volatility, SBI Insurance Group is 1.14 times less risky than Continental Aktiengesellscha. It trades about 0.01 of its potential returns per unit of risk. Continental Aktiengesellschaft is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,577 in Continental Aktiengesellschaft on September 3, 2024 and sell it today you would earn a total of 607.00 from holding Continental Aktiengesellschaft or generate 10.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Insurance Group vs. Continental Aktiengesellschaft
Performance |
| Timeline |
| SBI Insurance Group |
| Continental Aktiengesellscha |
SBI Insurance and Continental Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and Continental Aktiengesellscha
The main advantage of trading using opposite SBI Insurance and Continental Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance position performs unexpectedly, Continental Aktiengesellscha 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 Continental Aktiengesellscha will offset losses from the drop in Continental Aktiengesellscha's long position.| SBI Insurance vs. Richardson Electronics | SBI Insurance vs. Methode Electronics | SBI Insurance vs. HOCHSCHILD MINING | SBI Insurance vs. Benchmark Electronics |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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